Coffee Market

The c market spent another week chopping around a familiar range. Activity was light and holiday mode was in full force. Speculators and funds continued to buy slowly positioning for the anticipated index fund rebalancing buying that should hit the market late next week. Lack of any other news has this the focus. While the potential buying is notable past experience has seen that the actual event rarely lives up to the anticipation. Still, a near term reason to keep prices toward the higher end of the recent range. There is little to speak of from the fundamental side of things. Physical business is very light and sporadic. Harvest activity is picking up a little more out of Central America after some initial delays. The crop in Brazil continues to develop well. Not much to speak of on the macro side of things either. Another long holiday weekend ahead has interest minimal in all directions.

Technically the market remains rangebound and mixed. There is no clear bias across indicators at this point. Chart patterns are fairly ambiguous as well. Would expect a rough range of 155/180 to hold prices for the coming month or so without any notable developments. At this point would maintain a patient approach to adding coverage unless needed though would consider extending a bit if prices push back toward 150. Overall, the declining volatility and choppiness of the activity suggest that the market has found some equilibrium for a while as it awaits some notable development. Expect more of the same over the coming weeks.

Year end: Notably the market lost about 27% on the calendar year. The below chart shows this year’s activity highlighted in grey, with the last twelve years included for some perspective.

Tea Market

A quiet holiday week overall. Demand continued steady overall as many buyers continued to close out the books on 2022 . Lower qualities saw more demand than usual as the price continued to mirror quality across the board. Looking to next year, Ceylon continues its woes and India is already reporting a reduced crop so it’s fair to expect supply to tighten a bit. Argentine production improved a bit but remains behind normal volumes. Continued good weather is needed for output to catch up.

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