It’s another rainy day in New York City. Softly sweet so silently it falls, as cross-town traffic crawls…
Is it funny that a group named “Chicago” wrote a song we hear in our heads on rainy days here in NYC?
Anyway, the market tried to break out of the range early last week, and funds continued to sell the market hard. Breaking support at 10400 took us as low as 10335 before roasters really dug in. The next day we tried to make a new low and could not, and so the subsequent short term systems buying combined with roasters and we came back above support once again.
As we write this, we remain in a sideways trading market. The disaggregated COT issued Friday for trading as of Tuesday June 20th showed funds long 43077 (down 2503), short 23339 lots (up 4723) meaning funds sold net total 7226 lots. Interesting that short funds are now trading more aggressively than long funds, though overall fund trading has them net long about 20000 lots. Those fund shorts will be fuel for a rally from some point, not here, not now.
The market remains focused on Brazil and rains that have come, but sporadically and overall, more is needed in the coffee belts.
Macro wise, dollar variability these last days have had commodities reacting. Meantime we’re starting to see Brazils coming in and being graded for delivery. Much more is expected to come.
Market is still stuck in a trading range, in spite of lowering the downside early last week. We still don’t think the market is finished testing the downside.
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All the best,