For now it seems to be that weather is the primary factor. The Real has been strong. Today USDBRL 5.1313 -0.04 (-0.7735%) and USDCOP is 3,621.51 -0.34 (-0.0094%). Futures spreads are very steady today. Prices are very steady as well but resistance is certainly present. The typical strategy would be to sell the strength although the market has room certainly on the upside. Volatility has been creeping higher. The OI has been increasing which means new business on both sides. Today’s report shows a nearly zero change indicating, likely, short funds covering and new selling probably delta related. Haven’t seen forward selling which would indicate origin.
Next five days:
Dry weather in most coffee areas in the coming days. The few precipitations happen only in the south of Bahia and in the north of Espírito Santo this Thursday and next weekend.
We are monitoring a cold front expected next week. Until yesterday, rain was expected to return to Paraná, São Paulo, Espírito Santo and the south and east of Minas Gerais, in addition to a decline in temperature. However, in this Wednesdays update, the cold front is forming further south and cannot reach the coffee producing areas. The change is not final and will be followed in the next updates. The fact is that according to the most recent information, most coffee areas will remain under dry weather and high temperature for the next 15 days.
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