BLUE LINE = BRLUSD
Arabica opened at the highs and closed at the lows in a 19.20c range and a net change of -15.70c. Robusta established its high and low on the same day, the 8th. The close in RC was not as dramatic as in KC causing the arbitrage to drop 15.38c for the period. Nevertheless, funds were the primary sellers while commercials bought. In KC, the selling came from all spec sectors, almost half of which were Index funds, significantly bearish COT indicator. Specs, however, also bought delta.
The days after the COT report were marked by weakness. On Friday of this week, after the market broke through 200.00, and making a low of 194.80, a rally ensued. Although the market made a high that day of 202.15, it settled below 200.00. The strength on Friday was not impressive, imo. Together with the quality of selling, namely index, the COT on its own continues to be bearish. What was impressive on Friday was the behavior of spreads. They were weak as the market headed to the lows and reversed as prices recovered. UZ traded from a low of 2.30c and settled at 3.20c. During the post close it rallied to 3.95. Why the strength? It could have been day trade short covering in a thin, Friday post close market. It could also reflect a shortage in physical or the mimicking of the previous spread behavior, the NU. Warehouse stocks continue to fall. Whatever the reason, there is a disconnect between the outright market and spreads. Letís see if Monday w Iíll provide a clearer picture.
« Back to index