So what now - Stay Long or get side lined at 165 ?
While Iím sympathetic to the idea that headlines around the off-cycle deficit are ramping up and that there is the possibility for Coffee to find support from a firming BRL, there are enough cracks beginning to form here in the Bullish thesis that personally Iím out.
Main areas of concern for me are flags from Brazil. I would have expected Brazilian differentials to have firmed by now in front of their crop (regardless of KC price). This raises too much doubt for me around tight supplies in brazil. KC Certified stocks building into this rally is another large concern. I know that there are market participants out there that say it doesnít matter and that they will be needed later. Perhaps they will be proven right. That said I canít ignore the signal of rising stocks and the high level from which they will have to draw now to become a bullish input. Finally, if Brazil isnít as tight, this means that Central America will have to get more competitive in a few months at what are exceptional prices for the region.
When we reach for Analogs we get all the explosions - Iíve heard í97, í10, í14, and í16, and no doubt this will be a í21 to be referenced in the future. Having said that the í14 seems the most appropriate. I believe those who did the best were the longs from Jan who sold in June and then didnít touch coffee again the rest of the year.
I wish the forum continued success as a place for an open and objective exchange of ideas.