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Re: Safras & Mercado: Brazil's 2019 coffee crop is revised downwards; reduced final stocks
Safras estimate still appears to be on high side, while Conab may be too low splitting the difference puts us at somewhere in the mid 50's million bags in Brazil. Meanwhile between now and 2020 harvest stocks are likely to be below normal, we are at the bare minimum of 2.0 million bags, considered by some as the level necessary to have a normal functioning market. If we drop below, then shortage mentality should rise to the fore. So unless some new stocks come out of the woodwork, the shortage prospect remains. I'm amazed that some have forgotten such developing positive fundamentals in one sharp down day. If this were such a false move it has been a grand deception for the managed funds have gone from being short for 3 years, a very successful position, to going long. Although I think the managed funds managers are young and are prone to look at charts, I wouldn't declare them as being worthy of contrary indicators, look at the record they have been right for the past 3 years.
John M Moffatt