Blue line = BRLUSD

The market showed some volatility within its 6.85c range as prices dropped from the previous close, rose to make the 113.15 high and followed by a drop back to their lows. Volumes remained low but slowly increased as the period progressed. For the days following the COT, weakness continued but prices reversed.

The COT has no outstanding feature to it. The two way direction of the market may have prompted two way trading by all sectors. What is evident is that algos may still be absent and managed money continue to build on the long side. Commercials are also building long positions including in the forward months likely representing roasters, merchants and processors.

The selling that we saw as the market eased to the lows was consistent but not so profound and no match to the bids that were left unfilled. This week, prices appear to be trailing the Real as we look at the BRLUSD. The swings in terms of USDBRL however are much greater. What exactly is motivating the market is uncertain. As we have observed it doesn’t take much to push prices around until support and resistance levels are reached. We increasingly see reports of lower exports, including Viet Nam, and food chain disruptions as well as depletion of domestic stocks. The global struggle to resume normalcy or stay sheltered is intensifying and may result with even more dire consequences according to science and data. It seems that whichever way the world goes, the coffee picture will not change for now.

The week ended on a firmer note than the COT period. Forward light selling was present as prices rose. In Robusta, funds continue to have an elevated short position.


throw me some numbers