Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Hi Latam, I always have appreciated your comments some of which I agree with and some that I don’t. There is no doubt that if the market rallies sufficiently from current levels it will encounter selling, as it did with the rally to 125.95, and before that, and before, etc. etc. We have been seeing this behavior for quite some time. JuanV labeled the market a “sellers directed market” whether it’s rallying or dropping. Maybe it’s always so. Maybe it is the nature of this market. But for now the tremendous fund selling that the funds are doing merely attracts renewed commercial buying. Origin selling? I don’t pretend to know the physical market but I feel confident with futures. But as far as I know, a product need not be harvested or mined to be hedged. Is it not possible that much of the crop has been already hedged? Please feel free to educate me. The dramatic move that the Real has had may have had an impact on physical spreads but I don’t see a dent in futures. I have seen selling out to Dec20 which may or may not be origin. I believe it is, but it isn’t of any great volume, although pretty much daily.
I think that this market as a sellers directed market has obviously been a bearish one. Algos reverse but there isn’t enough buying to satisfy all the longs. We nevertheless have “COT cycles” which consist of dips where funds sell and commercial buying, like now, and vice versa like our last rally. I would also add that I need to agree with my buddy Phil about the weather, even though he committed a sacrilege by knocking the COT. Hype or reality winter is here. GT