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Posted by Tango
on September 18, 2019, 7:12 am
Robusta opened with selling and prices have remained on the low side of the range making the arb 41.36. KC also opened with selling but bids were present and prices are trying to stay above 101.00 with 100.00 possibly a support level. Yesterday the market tilted sharply lower as pressure that began from the early hours persisted throughout the day, hitting stops. Close to 1,500 lots traded in a flash from 101.70 to the low of 100.00. Not to sound prescient but the marketís drop was not surprising. The only impetus that this market has had is short cover by funds who continue to have the luxury of a heavily long market and a high delta position. Thereís not enough hay to feed all the horses. The Conab report had significant information by stating the stress that this yearís crop has and as been experiencing but the extreme low projections of Conab are well known in the industry to be overstated. Btw the weather is hot and dry in Brazil with some light moisture in the far southwest. But the current dynamics are not encouraging for longs. Buying for day-trade or very short term reasons is great but a longer term bullish view is very unreliable. Longs are present in the outright market, option market and in the physical/actuals market. Selling in the forwards was present throughout the day as the Real and the CPeso both dropped.
Today major currencies are all down against the $ as a rate drop in the US is expected and has been discounted by the markets but more than 1/4 % is a possibility. $Index is higher but the BRIC currencies and other EMs are unchanged to higher. USDMXN is 19.3572 -0.005 (-0.0258%), USDCOP is unchanged at 3,382.1001 and USDBRL which closed at 4.0773 is 4.0741.
Bond futures are higher but all other markets are very near unchanged. Metals, crude and equities are lower, grains are slightly higher as are sugar and cocoa. Cotton is lower.
Our market has just made a new low and is under slight pressure but is generally aimless at the moment. 8:00 is uncertain. Will there be more selling? Will the funds be buyers or sellers?