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Posted by Tango
on January 24, 2020, 7:25 am
Prices began close to unchanged and drifted lower non stop to the current general level of 110.00. We have seen this area to be generally impenetrable. The depth of market shows good buying both in the front month and in the forwards. The normal everyday players are the funds, who are sellers, and commercials, who are happy buyers on the way down. The rallies that we occasionally see, like yesterday, are the entrance into the market by either large or small traders or swap dealers. We also see occasional origin selling during times when the Real is weak and the coffee market is firm. And so, considering the fundamentals, the market seems to have a natural tendency to ease. We have occasional rallies that are mostly temporary. We can see more profound moves if there is a consorted involvement by buyers but, imo, as long as fundamentals are as they are we remain bearish in the big picture. For today, being Friday, it may bring unexpected moves. 8:00 will likely bring fund selling regardless of what trajectory the market takes. Spreads have been steady possibly trying to mimic Robusta. There has been a great deal of CSO activity that has moved the MarMay by around $20 to Even this morning. The reason is not known, by me any way, but RC spreads can become very volatile from time to time, the Match arb is 49.71.
The $Index is higher as most major currencies are lower. The Yuan is lower but other BRIC currencies are higher. USDMXN is 18.793 +0.036 (+0.19%), USDCOP is 3,359.3201 +0.32 (+0.01%) and USDBRL is 4.1724 +0.0021 (+0.05%) and in line with the CME.
Bond futures are are slightly lower but steady, equities are higher and metals are lower. Crude and grains are are lower as are all the softs. It appears that there is a common pattern today with futures.