Good morning and happy first Monday of Daylight Savings Time.
The market, even the world, went through another roller coaster last week, with factors outside the coffee market dominating the news and the way we traded.
Monday was down on macro factors, Tuesday saw the market skyrocket back up with a greater than 10 cent range as the market once again focused on factors like inflation, increased logistical costs especially fuel costs, and up we went. The rest of the week saw us slowly give it all back again dominated by macro factors like currency, interest rates, inflation hurting buying abilities, and by Friday we were under Monday’s lows. Volumes were large most every day of the week.
This morning we blew through stops at 220.00 and tested intermediate support at 218.00 which held, at least for the moment. The more things change the more they stay the same as it seems like uncertainty and volatility will reign for now, meaning what we don’t know, can hurt us.
Support still 218.00 then 207.00 then 200.00 and we might have to try it all before forming a base and coming back some. The COT issued Friday for trading as of Tuesday, with Tuesday’s large rally factored into it showed funds still exiting long positions and short side adding a few new shorts. Long funds sold a whopping 10,679 lots while short funds added 1111 new sales. Trade was the offset, as it has been.
Brazil coffee exports again fell in February, down 13.6% to 3.4 million bags. “We are far from normal, with a lot of instability, alternating good weeks with bad ones, since the availability of containers and spaces on ships is still insufficient to transport what was dammed up in the port and to embark the loads that are arriving for export” said Cecafe President Nicolas Rueda.
ICE stocks went back above 1 million bags to 1,027,688 bags with 148,563 bags pending grading. The Brazilian Real this week just about where it was last week this time 5.04315.
Late news coming in that China just locked down the province of Shenzhen and its 24 million people owing to COVID surging yet again shows every time we think we’re moving on, it pulls us back in.
How can we be of help today?
All the best,
The Armenia Team