Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
A jump in the US dollar and collapsing commodity and world equity markets set the stage for a negative day yesterday, but coffee opened steady and managed to even take out the three previous day’s highs with an impressive run. It seems that the sharp break in futures last week allowed everybody who wanted out of longs “out,” and traders suspect that the break attracted some bargain hunting from trade houses. May coffee closed sharply higher on the session yesterday, and unlike many other commodity markets, coffee managed to hold onto most of the early gains. Ideas that the market is oversold and that coffee demand in general does not suffer much during recessionary times and some talk that end user buying will emerge on the recent break helped to support. The rally is especially impressive given the sharp rally in the dollar and continued weakness in global equity markets. Ideas that producer selling may slow during the Carnival holiday in Brazil along with strong cash basis levels for both Colombia and Central American coffees helped to support. The Commitment of Traders report on the weekend showed that trend following or managed fund traders exited nearly all of their net long positions for the week ending February 17th. This group were noted sellers of 5,383 contracts to end up long just 509 contracts. Exchange stocks had been slipping over the past month, but ICE certified arabica stocks have jumped over the past two sessions, and they were up 3,081 bags from the previous session yesterday to 4.187 million bags, with 19,915 bags pending review. Open interest was up 1,475 contracts to 122,189, which is a positive factor.
Coffee Market Commentary – 2009.02.24
by Terry Roggensack on February 24, 2009
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
A jump in the US dollar and collapsing commodity and world equity markets set the stage for a negative day yesterday, but coffee opened steady and managed to even take out the three previous day’s highs with an impressive run. It seems that the sharp break in futures last week allowed everybody who wanted out of longs “out,” and traders suspect that the break attracted some bargain hunting from trade houses. May coffee closed sharply higher on the session yesterday, and unlike many other commodity markets, coffee managed to hold onto most of the early gains. Ideas that the market is oversold and that coffee demand in general does not suffer much during recessionary times and some talk that end user buying will emerge on the recent break helped to support. The rally is especially impressive given the sharp rally in the dollar and continued weakness in global equity markets. Ideas that producer selling may slow during the Carnival holiday in Brazil along with strong cash basis levels for both Colombia and Central American coffees helped to support. The Commitment of Traders report on the weekend showed that trend following or managed fund traders exited nearly all of their net long positions for the week ending February 17th. This group were noted sellers of 5,383 contracts to end up long just 509 contracts. Exchange stocks had been slipping over the past month, but ICE certified arabica stocks have jumped over the past two sessions, and they were up 3,081 bags from the previous session yesterday to 4.187 million bags, with 19,915 bags pending review. Open interest was up 1,475 contracts to 122,189, which is a positive factor.
Tags: Coffee, Commentary, Softs
About Terry Roggensack