I have often remarked on the inverse correlation between price and #commodity inventory (stocks).
As you can see from the graphic below, in some cases you can basically just invert the certified inventory to see a very basic price model (lower inventory = higher prices).
However, while Certified stocks were rapidly increasing from washed #Brazil’s imports, the GCA stocks were rapidly declining due to seasonal flows. This made for competing #bullish and #bearish pressures on #kc.
Going forward we would expect GCA stocks to increase from the coming Brazil crop (harvests begin April/May) but less than usual because of the smaller crop.
This is why we are expecting short term bearishness and longer term bullishness. That said, given the enormity of the coming deficit, many are expecting the nearby bearishness to be short lived or non-existent.