Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
ORIGINS PLAYING AGRESSIVE TOWEL AND SELLERS - Rodrigo Costa
In the United States there are 9 job openings available for every 10 unemployed people, a full employment situation where there is a gap between the qualifications required by employers and those offered by the applicants.
Disclosure of the maintenance of the unemployment rate, with the creation of jobs well above the minimum necessary to reset the market, initially made the US dollar rise, but as wages increased less than expected, investors took a little bit of the bet of additional interest increases.
Trump threatens new tariffs for the "trading partners" with which the country has a large deficit, a move that if carried out with severity can press inflationary indicators, since America has been import of deflation in the last decades.
The stock market had a positive week, with gains of more than 3% for the main indices of the big economies in the world. The CRB fluctuated around 200.00 points, with gains of 6.81% of the cocoa agreement, 3.05% of nickel and 2.18% of cotton, and losses of 4.32% of demerara sugar, 2.97% of soybean and 1.35% of aluminum.
Coffee in New York took a very short time, trading between $ 119.60 and $ 122.30 cents a pound to the despair of anyone who wants volatility to trade the futures, and the joy of the participants who are sold in volatility.
The expiration of April's serial options on Friday drew prices from May to close to 120.00 cents, where it had more than 3,000 batches of open contracts.
The tone of waiting for the arrival of the Brazilian crop has left impatient some sellers, who apparently have been very aggressive in sales of differentials for the second half of 2018 and first of 2019. Discounts incompatible with a possible lighter replacement, give signs to importers that soon, soon other sellers will rush to supply the books on a historically comfortable basis - for those who buy.
Salespeople are already missing out on the right start of the widening of the differentials, even with the futures market having been "stubborn" for not listening to the scream of the Altists - go ahead. Probably the strategy of selling cheap should not have hurt enough in 2017, or who sells has the "certainty" of the terminal high or even a large devaluation of the Brazilian currency - all "easy" to predict.
The demand has been better overall, reflecting a need for roasters coverage and also because they have been encouraged by the cheapness of some offers.
Coffee stocks in Europe rose 147,000 bags in January, for a total of 9,925 million bags stored in reported ports. In February he expected a fall, just as in March, given the demand noted.
Brazil exported 2.3 million bags in February, down from 2.59 million bags shipped in the same month in 2017. The perception of a good volume of coffee in the hands of producers and future sales were well below average, The chorus of the bassists increase with the belief that we will have a selling pressure at the beginning of the harvest, something that has not lived for about three or four harvests.
Investment funds in this scenario continue to be short-listed at the terminal, well ahead of the record high, though some non-commercials have bought the market in the past two weeks. The origins, on the other hand, are already throwing in the towel, as we have seen in the report of the principals sales equivalent to 2.36 million bags in the five business days until March 6.
Difficult to imagine how the differentials can be cheaper if NY falls more and the Real does not weaken.
The break of the 40-day average at 123.25 cents may bring some buybacks from the speculators, and a new low (118.55) should spur system funds to boost their sales and force some liquidation from those who have been getting long lately.
A great week and very good business at all.
Rodrigo Costa *
* Rodrigo Corrêa da Costa writes this report on coffee weekly as a collaborator of Archer Consulting