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Weekly Short Report Terra Forte

Dear friends,

As we mentioned on our last report, COT came out showing a stunning record short position. Investment funds kept pouring sales even though many positive fundamental signals are in place.
Exports from Brazil are decreasing rapidly and tend to continue, Colombia as well, Vietnam hasn´t picked up yet, consuming stocks are being dented and differentials in single digits. Therefore a correction was expected.

Some sources insist to say producers are retaining coffee but we disagree with this view.
We see exhausted stocks in Brazil, producers are offering, however the volume on offer is not enough to make us competitive for the time being.
It is of course a very arguable subject to talk crop numbers, internal stocks, etc. Every company has a view and must be respected.
According to our numbers we were expecting this to happen and keep believing that the first semester will be a very difficult period for Brazil.

Weather was very good since last days of December until today. Very good amount of rains have fallen over most of the coffee belt and according to Somar the first half of January will continue helping the plantations.

Wishing you a very nice weekend

Terra Forte Trading Desk