On August 5 I wrote that sooner or later fundamentals will become more important than the strong Dollar and the weak Real and/or the traders with short positions will buy the market in order to cover themselves. Today, the September coffee contract moved aggressively upward to close at 1.3350, up 570 points. With first notice day a little over a week away, some of the activity on Friday and today was traders switching from September to December, but mostly the action was from the realization that the current crop will be smaller than expected. We are seeing a late harvest this season and that usually implies a smaller crop.
I am attaching two articles. One from Friday by Morgan Stanley and another from Quasar Group.
After today’s upswing tomorrow could be a down/retrenchment day, but do hold your breath.