Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
The market made its high early in the period and slid from then on to end at the lows. Although commercials had the opportunity to sell early in the week, the quantity sold seems to be an inordinate amount, as if the trade sold weakness as well. Interesting is the fund shorts who were covering and taking advantage of the weakening market. There are no algos operating in RC that I can observe. We also see an increase of longs in the institutional and large traders category. As we know spreads are much more volatile in this market compared to KC. CSOs have also been active and continue to provide opportunities. The MayJul spread has had a wide range and is subject to delivery rule change specific to it, but otherwise the spreads previous to it, and after it, have been at a premium. JulSep closed on Friday at a 10 premium. If I remember correctly, the MarMay spread went as high as 65 premium. Even if we are not spread traders it is a curious situation. The thousands of EFP that we normally see at notice time have not been present. Like KC, RC EFP are used to undo future hedges of both producers and consumers in exchange for physical. It would be interesting to know why this premium spread situation exists considering the weak market and the healthy supply of robusta in both Viet Nam and Brazil. One would think that commercials would love to roll their positions/inventories at premiums or even at flat.
dirt, if your reading, I always enjoy your charts and your poetic comments, as well as your astronomical, MIT mind. My relationship with charts is not that close. It’s not that I don’t believe in them, I just don’t relate to them like most. Some charts are more straightforward than others, like Nagual’s, Alf’s Phil’s and JuanV’s. I enjoy yours and Bee’s and others but commentaries are needed for me. As to the the “imminent FND weakness” that we may see, I relate to it because it has been a repeated pattern as described by Nagual. Hopefully he will explain it at some point. However, even though it is a generally consistent event depending on certain conditions, there is no guarantee as you know. The fact is that we can’t expect to much from this market one way or the other regardless of the reasons. GT my friend. Glad your posting frequently.