Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
As always I have the highest respect for all opinions but this time my take of the OI/Spreads data is bearish.
OI decrease (big picture, that is the fall from 279K) shows that this market was able to "amend the exuberance". Bottom line the process consisted of bringing back the funds and managed money community to the earth.
Spread shows other bearish reality, we just passed through a period of relative low availability (the 1Q-2018) and now we are going to dive into an abundant coffee flow, that creates a relative cheaper value expectation as far as you move along the futures curve.
To make things heavier, the Brazilian Real devaluation makes internal coffee prices not as low as they were just weeks ago, isolating the local brazil coffee flow from the negative effect that low futures prices should have.
Consequently current prices is just broadcasting the reality: this market is (remains) against the ropes and will fall further.
PS. A short and temporary bounce is likely to occur the next days, but it would be a selling opportunity.