Good Monday morning to you,
It’s a balmy summer Monday here in the Northeast with summer now fully ensconced here. Good day for an iced coffee, or two, or…more.
More of the same last week. Market moved mostly sideways in the already pre-established range 100.00 to 95.00 more or less in Sept. At the top end of the range we’d see funds do more selling, at the lower end trade would do some buying. Disaggregated COT showed the fund added another 4500 lots. The fund category is net short about 28,000 lots but more important at this time of year, their gross short is over 63,000 lots.
I say that because here today we see Somar calling for colder weather in the coffee areas, and already some of the funds are not comfortable with their positions, and we’re up 600 points in a market that couldn’t find that kind of strength all month. The funds had really short term on their minds but seemingly forgot this time of the year can be “interesting” and although we really haven’t had problem cold weather in a very long time, there’s always that outside chance for another July 1994 when two frosts in Minas hit coffee hard.
Today’s move has the 5 day average just under the 21 day and we could see some of the short term players just exit their short positions all together, that in itself would give coffee a nice little pop. More important numbers like the 200 day average is far away (over 114) that’s a number the longer term players are interested in.
We came in this morning about to write a post about demand destruction and the pandemic and now, weather has more of our attention. We’ll see where this goes, but funds with such a large gross position at this time of the year could be a roller coaster. Keep your eyes on the market, it could be one of those times where we get large moves in a “blink”.
We have some Supremos just into the warehouse (over the weekend, doesn’t get any fresher). Please check the offer list that accompanies this post for all the nice lots we would love to sample for you.
Remember July 3rd this year (Friday) is the holiday day for July 4th (a Saturday). Our office, the warehouses, and transportation will all have those days off. We’d love to help you get ready for the holiday.
The Armenia Team