Good day,
It is a stunning fall day here in the Northeast. High is expected to be something like 78 degrees. Trees have all turned fall colors. Hot or cold coffee, your choice, can’t go wrong.
Another crazy week here in the coffee market. Things were looking like a consolidation was about to take place, then Wednesday night the Fed announced the expected 75 point rate hike, and in the news conference that followed, Chairman Powell said the Fed would likely have to continue to be aggressive going forward, and that they wanted to err (if they do err) on being aggressive. This was in contrast to the general opinion that things were getting a bit better and that the Fed might be able to curtail their aggressive hikes. Thursday was another big down day and much of the recent buying threw it away again.
We said we really wanted to see the COT from last week, that would show the Wednesday, Thursday, and Friday trading which we thought was still aggressive fund selling, and that was right. Long fund sold 4321 lots to go to 17,324 – lowest in a long while. Short fund also aggressively sold 7185 lots to go 31,914 lots short, largest for them in a while. Those numbers are likely bigger this morning. Trade was the offset again to this selling.
ICE stocks up to 387,986 bags with 171,765 bags pending.
The Brazilian Real remains strong after the election of Lula – now 5.04934. Colombia Peso conversely weak out to 5074.8
We’ll share this news article about Colombia here from Asoexport: “We will not sell Colombian coffee at a loss”.
Sat Nov 05 06:02:29 2022 EDT
At the exporters’ event, in the so-called ‘Coffee Summit’ of Asoexport, the manager of the National Federation of Coffee Growers, Roberto Vélez Vallejo, spoke clearly and loudly regarding coffee prices and the possibility of growing Robusta coffee in the country to compete with the traditional Arabica coffee. (Read here: Domestic price of coffee breaks its record for the fourth time).
“We are not going to be willing to sell Colombian coffee at a loss”, said the leader, welcoming the clamor of coffee producers, who are concerned that the price of the grain may be below production costs.