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Posted by Tango
on May 29, 2019, 7:07 am
Again the early hours indicate a steady tone but in a narrow range, and again Robusta with an arb value of 33.23 under seems less enthusiastic than KC. The depth of market indicates a thin buy side with forward bids far away and a very thick sell side. Everything is normal. Offers build up as longs liquidate delta or outright positions and Robusta lags. The buying is to be respected as well. It does usually fail but it is autumn in Brazil and sentiments are on the friendly side. The funds have the capacity of buying their shorts and going long. Whether this will occur or not is certainly worthy of debate. For now, buying is expected at 8:00 while sizable offers rest above 96.90. Spreads are steady in KC with JulSep -2.15 last. Other spreads are steady and have become very thin. The Real turned steady yesterday but the currency has a limited affect on KC as most funds are driven by other factors. Origin however is certainly closely watching. Yesterday activity extended out to Mar22 as a result of outright selling and EFP posts.
Today currencies are mixed rendering a slight higher DX. EM markets are mostly lower against the $, including the Yuan. USDMXN is 19.2249 +.0325 +.17%, USDCOP is unchanged at 3374.60 and USDBRL which closed at 4.0243 is valued at 4.0351 on the CME. One futures continue to be steady and obviously holding up the more precious of the metals while the more industrial ones are lower with equities. Crude is also sharply lower while Brent however is almost at an 11.00 premium. Sugar and cocoa are higher while cotton is lower.
At this moment the market has turned a bit softer.