Good Morning and happy Monday,
From the “high note” on Friday Jan 15 to the “low note” on Friday Jan 22 we saw a move of nearly 9 cents per pound, in a steady move lower. Early trading this morning saw the market go a little bit lower than last week’s low, but again there was trade based buying waiting. The buying that took the market to the highs was fund based as we expected, but in larger size than we expected. The disaggregated COT issued on Friday Jan 22 for trading as of Tuesday Jan 19th showed that funds were 42,237 lots long
(+3981) and 17,754 lots short (-4405) meaning funds bought 8386 lots. The short number is the lowest gross number in some time, perhaps an indication that traders are indeed concerned about the coming Brazil crop. The selling was all trade.
Where the market sits this morning its again down near the 12000 support that finds the trade buying. Technically though, where we sit this morning is also below the 21-day moving average we use for momentum indication. It likely means at least some of the quicker moving funds have already exited long positions only recently taken. The market has failed so far under 12000 and above 13000 which probably means more rangebound trading to ensue.
Ice warehouse stocks again rose for the week now at 1,588,890 with 563,172 bags of Brazils. There has been near steady 100,000 bags to grade nearly every day meaning the Brazils keep coming.
Our natural Yirgacheffe is now in the warehouse. There are less than 100 bags remaining, please talk to your trader if you would like to reserve some or see a sample. We have some nice RFA Certified Sumatra Mandheling available. Some nice Colombia Supremo instore as well.
How can we help you today?
All the best,
The Armenia Tea