Attacks on tankers near the Hormuz Strait of Iran has raised geopolitical tensions in the Middle East, allowing crude oil to move sharply higher following the recent downtrend.
Other commodities have been mixed; corn and sugar are up, metals are down, and coffee is consolidating following the partial retracement of the big rally seen in early June.
The BRL remains firm at 3.84, with support emanating from general EM risk-on optimism following expectations that the Fed may cut rates soon.
Also supporting the currency has was the presentation of Brazil’s reform plan – expected to generate savings of 9 bn reais over the next decade – which was welcomed by investors.
Brazil shipments reached a record 3.5 mio bags in May, +103.5% y/y, according to CeCafe. Arabica exports rose 95.5% y/y to 2.8 mio bag, while Robustas rose to 376,257 bags vs 46,621 bags a year earlier.
Indonesia exported 5,961 tonnes of Robusta from Lampung in May, down 24% y/y. On a m/m basis, exports rose 38% as some areas in southern part of Sumatra had started to harvest new beans.
ICE certs are at 2.38 mio bags, London certs are at 12.578k lots
We current net non-commercial position in KC is -50K lots and RC -29K lots.