Coffee Traders Forum
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Posted by Tango
on December 6, 2019, 7:16 am
RC opened with buying and both markets exploded higher at the KC opening. The arb is up to 61.60, spreads are steady in both markets especially the JanMar KC. Even prices have been points of the most resistance and the market is trying to break 126.00. Yesterday the move from the previous day’s low of 120.80 to the high of 125.30 added to the confidence of longs, who have been skeptics. Activity extended out to Sep22 including outright trading, which was more than 50%, and EFPs/EFSs. Premiums on options on spreads were very strong. Prices have broken through 126.00 and we are now waiting for buyers at 8:00, probably, as funds are likely short covering. We’ll see what today’s COT confirms.
Bond futures are mixed as are all currencies. BRIC currencies are mostly higher as are LatAm currencies. USDMXN is 19.3449 -0.0241 (-0.1244%), USDCOP is 3,454.8999 -7.1 (-0.2051%) and USDBRL is 4.1811 -0.0045 (-0.1075%).
Equities are higher and metals lower, except for the more industrial. Grains are higher while crude is lower. Softs are all higher this Friday. CTF traders are grasping for explanations for the market’s strength. Is it technical or fundamental? The answer is not clear but there is another possibility which is the macro environment. Index funds are buying new and other managed money are covering. The market has been depressed for some years and it may just be time for coffee to revive.