Coffee futures basis the March contract rose 0.95 US cents per pound to 356.25 cents during the week, with technical momentum buying expected to push prices toward 365-370 cents before encountering origin selling.

The market tested critical support around 340 cents earlier in the week, with Wednesday seeing significant roaster fixations that helped maintain prices above this threshold. Roasters demonstrated willingness to add futures below 350 cents, particularly in the March contract where the inversion between March and May remained steep.

Historical patterns showing strong rallies in front-month futures following passive index roll periods, expected in approximately two weeks, prompted roasters to secure March positions before liquidity erodes. As roasters must fix their exposure by first notice day, the time window for March futures fixations is narrowing.

The market structure suggests consecutive up days in the March contract heading into first notice day are likely once the passive index completes its position roll. The liquidity reduction following index positioning typically creates conditions for upward price momentum in the front month.

Roasters’ tactical approach reflects lessons from previous periods when delayed fixations left them exposed to vicious upward cycles as the front month approached expiration. The particularly steep March-May inversion adds urgency to completing March exposure management.

Technical momentum remained supportive through the week, with the market holding above the 340-cent support level that proved critical for near-term direction. Breaking below this level could have opened the path toward 325 cents, while holding above it maintained the potential for moves back toward 350 cents and higher.

Origin selling is anticipated at the 365-370 cent range, which could cap the current rally attempt. The combination of technical buying, roaster fixations ahead of first notice day, and pre-index roll positioning is supporting near-term price strength.



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