June 19 2019
The coffee markets remain under the cloud of the perception of oversupply, significant levels of both producer and consumer stocks and a total lack of supportive fundamental threatening weather news and along with the recent evidence of a much reduced speculative and fund net short sold position, within the New York market. This all contributing towards a lack of underlying support, which sees the markets struggling to remain within the prevailing soft trading range.
For the present the talk of the potential for frost damage within the main coffee districts in Brazil is off the table and likewise in terms of the threat always being a little higher at the time of the few days of clear nights around a full moon and should it be accompanied by a cold front, is over for the month of June. The full moon was last Monday and is starting to wane, with the next full moon due on 16th. July.
Of course, not all of the historic Brazil coffee frosts have been related to the few days around a full moon, but are related to severe cold fronts and one might think that forthcoming cold front forecasts for Brazil shall bring to the fore some hesitant speculative market support. Which is perhaps one of the threat factors that is assisting to limit the speculative downside potential for the coffee markets for at least the short term, until Brazil starts to head towards the spring season in the August.
Tomorrow is the catholic Corpus Christi public holiday for some catholic dominated countries and including Brazil, which shall likely encourage many within the country to take a bridge day follow on holiday on Friday and an extended long weekend. This shall most probably slow Brazil price fixation hedge selling activity for the end of this week, which shall take some of the selling pressure off the markets for a couple of days. But who knows what the relatively high volume and often unpredictable speculative sector of the markets might do and the potential for a long weekend holiday in Brazil, cannot guarantee a steady to buoyant market.
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