Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Hello CoffeeSpec12, A large part of the commercial selling is option related rather than physical related. The delta long position is 45k and the delta short is 20k. As the market rises both longs and shorts need to adjust their respective delta.
As to the funds, a good percentage of funds are algos (systems, momentum) and are covering shorts because the market reversed and reached a level that prompted them to reverse as well. If the market were to drop again they would revert to selling.
Both the delta traders and the algos are unaffected by weather, currency, fundamentals, etc. The algos will buy on the way up and sell on the way down regardless of the reason why prices are moving. Delta traders will sell rallies and buy weakness also without consideration of outside factors. GT