London Falls As NY Harbors Hope

Everything “calm” in Cyprus after all; there was no panic at the bank branches. Panicos Demitriades (an interesting name for this current situation), the president of that island’s central bank, received power from their parliament to impose whatever was necessary to avoid confusion. Among the measures, there is a daily withdrawal limit of 300 Euros per person and transfers to another countries – however more changes are expected in a few weeks.

In the USA, the data for durable consumables orders for February and an increase on the prices of real estate helped the S&P to have its highest closing ever (the highest level is untouched for the moment still at 1576.29).

The main indexes of the European Bourses ceded in the week, while in the Americas they went up. Among the commodities, we saw higher prices for the energy complex and lower prices for grains and sugar.

Coffee in NY managed to close with a gain of US$ 2.45 per bag, even with London losing US$ 5.28 per bag.

The drop in Robusta was due to the better prognosis for rains in Vietnam. The move may still trend lower given the long position of the funds which is near record and the technical picture that points to a more pronounced correction.

The Arabica may not be unscathed, and may drop again, especially after the news that the Brazilian government was going to help the producers, which translated in the end basically in postponing only their debt payments.

In the physical market, the flow was slow in the main origin, apparently due to the producers awaiting the positioning of the National Monetary Council, which says that the increase of the minimum price continues to be evaluated. This answer that should not please some bulls that have eventually purchased the market hoping for something more substantial (has anyone done that?).

Differentials in general were sideways, being less attractive than hoped for shipments in the first semester and wider for the second half of this year. The industry is seemingly not late in their short term replenishing and with soft prices at the terminal there is no reason for them to change their posture.

The approaching harvest of the Conilon in Brazil, the weakening of the Real and London losing strength should take the C to new lows.

Have a good week everyone.