Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
First the spreads - there was good selling by swap dealers while managed money bought. There were different sectors establishing new spreads and liquidating them. The JulSep traded down to -2.40 from -2.05. Later in the week the spread traded at -2.20 to end at -2.30. It seems that spreads are more volatile than outrights.
Futures - If we look at the Disaggregated we see that swap dealers sold, and funds and small traders bought, netting 4,566 buys. I think that we can safely say that the other side of these buys were commercial. This is also consistent with the prior COT report and something to ponder over when anticipating big upside moves.
The COT will likely reverse for next period. Commercials will be buyers, old or new doesn’t matter, and managed money will be new sellers. I continue to believe that managed money always has the luxury of time. They will robotically sell based on their program. I also believe, and I am repeating myself, that the buyers don’t have that luxury. We know what was sold in the last two reports. Do contracts need to be bought back. Also the wild card is any combination of the other sectors who can come in either way. Now with option expiration out of the way we may be able to fly through 120.00, maybe.