Arabica Coffee Futures Fall on March-to-May Roll Activity

Traders in the global soft commodities markets made key moves last week as contracts approached rollover deadlines and major holidays loomed. With both the US and Brazil observing holidays on Monday, activity in coffee and sugar futures was heavily influenced by positioning ahead of the weekend.

Arabica coffee futures slipped slightly as a wave of March-to-May contract rolling took place, while sugar dropped on weather forecasts and cocoa rose on supply concerns.

Why Did Arabica Coffee Futures Decline?

On Friday, March Arabica coffee futures closed down 0.95 cents, or 0.6%, at $1.665 per pound. This came as traders executed substantial roll activity from the March to the May contract ahead of the March 19 first notice day — the first date when delivery notices can be issued on the March contract. Volume was more than 50% above normal as a result. The spread between the near month and forward contracts also widened, with the March contract trading at a discount of around 3.3 cents — the widest since December 9.

What Happened in Other Coffee Contracts?

While Arabica softened, May Robusta coffee futures bucked the trend. They gained $16, or 0.8%, to close at $2,036 per ton — reaching as high as $2,042, the highest level since December 8. This strength came amid lower trading volumes overall, but firm interest in the next active contract.

Sugar and Cocoa Market Moves

In sugar, March ICE raw sugar futures fell 0.16 cents, or 1.1%, to $14.88 per pound, retreating from the two-week high of $15.05 set on Thursday. March white sugar futures also dipped, down $0.60, or 0.2%, to $382.80 per ton. Meanwhile, cocoa saw gains. March New York cocoa futures rose $12, or 0.4%, to $2,931 per ton, touching $2,933 — the highest since January 20. London’s May cocoa futures added 2 pence, or 0.1%, to $1,989 per ton, supported by ongoing supply concerns out of Ghana.

Market Holiday Impact

Monday, February 19, marked a market holiday in both the US and Brazil. In the US, it was Presidents Day, while Brazil celebrated Carnival. As a result, American soft commodity markets were closed for the day, reducing liquidity and shifting key activity to the previous session.

Frequently Asked Questions

Why did March Arabica coffee futures fall last Friday?

March Arabica coffee futures declined 0.6% to $1.665 per pound due to heavy 3/5 roll activity as traders repositioned ahead of the March 19 first notice day. The move was technical, not fundamental, and part of routine contract expiration management.

What is the March-to-May coffee contract roll?

The March-to-May coffee contract roll refers to traders closing positions in the expiring March contract and opening new ones in the May contract. This typically happens in the weeks leading up to the March first notice day (March 19), when physical delivery can begin.

How wide is the Arabica coffee spread right now?

The spread between the March and May Arabica coffee contracts widened to around 3.3 cents, the largest since December 9, reflecting increased backwardation or near-term supply tightness expectations as the roll period intensifies.

Did other coffee contracts rise while Arabica fell?

Yes, May Robusta coffee futures actually rose 0.8% to $2,036 per ton, hitting a December 8 high of $2,042, showing strength in the robusta market despite the arabica decline.

Why were sugar and cocoa prices moving last week?

March ICE raw sugar futures fell 1.1% to $14.88 per pound on forecasts of rain in top grower Brazil. Meanwhile, cocoa rose 0.4% to $2,931 per ton in New York and 0.1% in London to $1,989 per ton, lifted by supply worries in Ghana.

Were US and Brazilian markets open last Friday?

Yes, markets were open on Friday, February 16, which is why the roll activity and price moves happened then. Both the US and Brazilian markets were closed on Monday, February 19, for Presidents Day and Carnival respectively.

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