Arabica clawed back yesterday’s losses basis KCU, just missing doing so in KCN, which settled 98.90, +75. 8am sellers appeared sending prices to intraday lows (97.05), however a wildly off-consensus US payrolls number (anticipated 7.5MM jobs lost in May vs 2.5MM realized gains with roughly half coming via hospitality and leisure hiring) helped swing sentiment and aided a BRL recovery through the 500 line, peaking at 4.9349. KC did her best to ignore the 3%+ move in the FX, staying more broadly in-line with the BCOM, and to some extent that makes sense; while prices in BRL terms have plummeted from the record 6.50+ less than a month ago to 5.00 today, it is still a historically high price in a historically large crop year. This marks a 4th consecutive week of lower lows and lower highs, though the week’s trading was clearly consolidatory; the daily range of settles for the 5 days were all between a low of 98.15 and high of 99.10. Spreads closed the day down, with N/U falling 20 points to -1.75 and settling on the low. This is only the 3rd time in the past 17 index rolls that the first day saw weakness in the front spread. London was the stronger of the two markets, rallying $37 to 1233. N/U tightened as far as -7 before closing -12, up $2. Rainfall in Vietnam has not quite met up with forecasts, remaining something to monitor.
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