Happy Monday to all,
Snow flurries are in the forecast for this afternoon. We’ve been lucky that so far our weather has been mild, though that probably won’t last for much longer. We’re drinking a lot of typical donut shop blend, medium roast and hot. How about you?
The Coffee C broke our support level 165 down to 162.50 and then tried more major support down at 154.50 where it based, at least for now.
There seems to have been some confusion as to when the index funds would start their re-index activities. Now slated to start this week and is expected to bring as much as 21,000 lots of buying coffee futures we are waiting on signs it’s actually happening.
Funds were more active last week. Long funds sold 1829 lots and now stand at 26,121 lots long while short funds bought 2984 lots and now stand at 40,593 lots short, still a sizeable position.
ICE coffee stocks stand at 830,272 bags which continues to climb and there are still 206,704 bags still pending grading.
News from Brazil about political unrest in the capital of the country. So far it does not seem to be hurting the Real which is a little stronger than this time last week at 5.29200. The Colombia Peso stands at 4859.1 about the same as this time last week.
Reports that exports from Colombia, Honduras and Costa Rica all were lower in December with production in Colombia falling 12% in December, owing to too much rain. There are reports from Brazil that this crop is very well sold and now most producers/exporters are waiting to see the maturation of the new crop before selling their remaining stocks. Diffs from Brazil much tighter than they have been in some time. This should bring some demand to the ICE stocks.
Well then here we go again. Will we see the expected index fund buying come to the market this week now? Traditionally there is some offset waiting on it, but then it goes in the direction of the buying or selling, this year expected to be buying as we have been saying. So far we’ve seen the market somewhat supported with average morning volumes. Support down there at 154.50 and resistance around 165 then 175.
How can we be of help today?
All the best,
The Armenia Team