Coffee Traders' Forum - A Discussion about Coffee Futures Trading

Coffee Traders Discussion Forum

Coffee Traders' Forum

Market *PIC*

With not much volume in a narrow range the market spent most of the morning above unchanged. The buy side of the depth of market has replenished itself after yesterday’s weakness but selling will resume laterin the morning as systems managers come in. Together with stops that are likely below yesterday’s low of 117.20, possibly at 117.00, the market appears tired and weak. Add any technical reason for traders to sell and we continue to see a heavy market. For the most part however, it’s a continuation of new selling commercial buying. And, if we peek into the forward depth of market we see sizable scattered bids across the board which may again be consumer bids. Basically, the selling that we see, systems together with longs’ big stops trading in small increments and the commercial buying that we see is nothing more than the reverse, the photonegative, of what we saw not too long ago in the 125.00 area. For now there are other headwinds as well. As Admiral illustrates, the market has not adjusted downward to the same degree that the Real has dropped. We remember ‘14’15 in the midst of a drought the Real was falling during Dilma’s crisis, KC fell from its highs around 229.00 to the 120.00 area and lower. But the there were 15 to 20mm stocks in carryover then. I don’t believe it’s the same availability situation now. There was selling in forward months as KC was rallying but we haven’t seen this at lower prices even with the lower Real.

Spreads are being hit on the bids as July selling is matched with forward bids. JulSep is -2.35 bid. RC is as still as KC with the arb at 38.62. Spreads there are also soft, consistent with a weak outright market. The indications of the Real and COP are given by CNBC but are early indication supplied even when the general market is closed. USDBRL is 3.6229 +.0008 and COP is 2835.00 +.83. All other currencies are down against the $. As I write, 225 N 115.00 puts were bought live at 1.08 avg. Bond futures continue to plateau downwards. Both the steady $ and rising rates are causing metals to drift lower. Equities are lower while oil is higher. Sugar is higher and cocoa and cotton are slightly lower.