Coffee Traders' Forum - A Discussion about Coffee Futures Trading

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Scale down bids were hit in May at the opening and selling ensued throughout the early morning. There has been good support and the low of the day seems to have attracted good buying at around 5:20 EST. May has scattered bids on the way down but the collective buying across the board is noticeable including 433 lots wanted in Sep at 120.00 which is around 1.25 cents below current levels. There are other bids in Sep in front of this bid however. On the sell side there are good offers starting at higher prices in May but in other months the offers are sparse. Although the COT does not show systems selling because possibly they were masked by short covering of other funds, my view is that they will provide pressure at 8:00. I may be wrong however and we may see a continuation of new fund buying. Option expiration is behind us but the COTs did reveal new fund buying in both markets. But we don’t know what happened for the remainder of the week. Whatever will occur, to expect anything dramatic in either direction may prove to be possible but remains unlikely. For now the market seems to be under slight pressure but remains in a narrow range. The MayJul is where it ended on Friday. -2.20/-2.15. The majority of spec shorts seem to have rolled and the spread may see some downward trading with a guess of 30k to 35k left in the May OI. The N OI is already close to matching the K OI at its peak. The JulSep spread is already showing support but that will change if the market eases as forward bids are hit. The RC arb shows some weakness in RC as well at 40.14 in July. USDBRL is 3.4247 +.0027 and the COP is 2712.50 +1.45. The $ is down against all other currencies but bond futures slid throughout the night causing metals to lose their gains. Lower prices than what we see were expected after the US and allies attack on Syrian targets was over with. Oil has reacted downwards and equities are higher. Sugar is lower and holding 12.00 in K while cocoa and cotton are higher.

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