Coffee Traders' Forum - A Discussion about Coffee Futures Trading

Coffee Traders Discussion Forum

Coffee Traders' Forum

OI/Market *PIC*

Today’s OI reflects the unadulterated picture. It shows new selling and new buying. The selling of course is for the most part systems, mixed with other sectors selling, and the buying is commercial and others in March and likely commercials in the forwards. If a put holder needs to hedge the position will register as new. However, it is probable that we would see this buying whether options were expiring or not, to a great extent. It has been the fashion for some time that on weakness commercials tend to be large buyers both for physical reasons and for delta hedging. The takeaway is that because of the 125.00 strike for now whatever Jan option holders buy below 125.00 they will sell above this price. For the longer term, the OI is bullish but the dynamics will not readily change. The arb is 45.02 and the Real is under a lot of pressure as the USDBRL is 3.1370 +.0780. Yet, commercials are buying and producers are not noticeable sellers in the futures, but maybe in the the physical?

JK, the systems are programmed to methodically sell ad infinitum unless the market rallies to 130.00 or so where they will reverse.