Coffee Traders Forum
[ Post a Response | Coffee Traders Forum ]
Re: A few quick thoughts
Thanks ShortDude. I would point out that last August saw the BRL move from 3.70 to 4.20 in those same 3 weeks. I'm not saying that the same won't happen again, but from what I see, Brazil is in far better shape than then and the US is in an easing cycle, unlike last year where it was tightening, so I do think the currency is a price tailwind from here. Price falling into every first notice period is not the kind of thing that will last forever but the spreads in coffee do make it more difficult to be bullish, I freely admit. I in no way know enough to say that the BRL won't go retrace back to 3.85 or 3.90, and the same old first notice day erosion could happen yet again. There clearly is the money on the sidelines to take it lower, but I am increasingly of the opinion that there are more bullish risks emerging than bearish, and that the market is complacent on what price can do as we've seen a combination of good supply and tremendously weak currencies for a long time. I certainly do not see a compelling reason to be short here, unless you knew the BRL was back to 4+ and next year's crop is made.