BLUE LINE = BRLUSD

The market began at the lows during the COT period and rallied 12c on that same day, reaching the 240.00 level and registering a volume of over 29k or 59% of the total. The next day, prices rose to 242.95 to set a range of 14.95c and a net gain for the period of +6.95c. The buying came from managed money which included over 3k lots from Index funds, likely in the form of options. Additionally, managed money bought over 10k lots of delta expressed as option spreads on the report. The sellers were of course mostly commercials. Swap traders sold which could be origin as the Real remains at a low level. Other reportable also sold. RC shows commercials selling to swap dealers, possibly the consumer sector. Large traders also bought.

The remainder of the weak resembled a holiday market. Outright volume returned to the teens, each day the market weakened, but not without rallies, and each day the market made a lower high to close at the lows of the week. Front spreads were initially weak but both the ZH and the HK remained steady in spite of the easing market. The remaining spreads continued to be weak.

We are closed Monday and we will have to wait to see if the weakness will bring lower prices as funds have turned sellers or will the market return to higher levels. There is talk of dryness and premature flowering but we still don’t know carryover stocks and stocks in private hands. Safras’ production projections of 61mm bags is worth considering.