Coffee Traders' Forum - A Discussion about Coffee Futures Trading

Coffee Traders Discussion Forum

Coffee Traders' Forum

Market *PIC*

The market this morning has been supported by sporadic buying. The tone is steady in continuation of yesterday’s late recovery. We have seen the market try to absorb the selling over and over again but with little success. Presently within a penny either way of current prices the ratio is 3:8 of buying vs. selling with close to 800 lots of resting orders but we know that additional selling comes in throughout the day in the form of systems and anxious longs. The market is quite capable of rallying but it would require massive short covering. Whether the market can break away from the limited range that it is experiencing or not the steady tone, even when the market corrects, is present. There are other positive signals which are the strengthening of spreads and the relatively elevated Sep volatility premium. The possibility of cold weather in Brazil is causing some traders to buy Sep options as insurance. Spread strength continues to be a reminder of the many fund shorts that continue to take their position for granted and have become too complacent. Nevertheless the market needs to prove itself. London is in line with NY as the May arb is 42.42. The March OI has dwindled there and the MarMay spread is no longer of interest. The MayJul is 30 discount. USDBRL is unchanged at 3.2458 and COP is 2864.50 -1.00. The $ is higher against all currencies while bond futures remain steady. Metals continue to ease and have changed their tone from steady to soft from the first day that Jerome Powell began is tenure with the Fed. Oil and equities are lower. All other softs are a tad lower.