MARKET TRIES TO SUSTAIN MARK OF 110 CENTS ON ICE FUTURES
Arabica even tried to rally on ICE Futures US, trying to follow the crude oil gains or getting support from fears around the first cold wave in Brazil. The fact is that it still lacks sufficient strength to sustain more significant gains, and therefore the July/20 position is unable to surpass the mark of 110 cents. The advancement of Brazil’s 2020 crop and the effects of the pandemic on demand projections inhibit bullish moves.
The arrival of the first mass of polar air is not so frightening, with meteorologists ruling out the risk of frost on coffee areas, but this serves as a warning to funds, which must seek some protection against the Brazilian winter, since the period of risk is just beginning. However, unlike last year, when funds switched from a net short to a net long position, which favored the rise in coffee prices on ICE in NY, they now hold a net long portfolio. As a result, the impact of these protection movements caused by the Brazilian winter tends to be weaker on prices. In any case, it is a period of volatility, which must be carefully monitored by both growers and buyers.