Thank you for your participation in this forum and work on the ideas to try to understand where this market goes. We are on the same page for sure.
Well, my best answer to when the short bubble in the coffee market will burst is "I don't know, but it must be soon.
Distortion with the physical market is getting bigger and bigger.
I insist most of the real bz is nonexistent at the current levels. Diffs are very high, but not enough to satisfy the farmer or the exporter. At current levels, all origins are losing TONS of money.
This is not the first time the coffee market or other markets are not reflecting the physical markets. Currently, the US stock market is growing in a long big bubble. But all the bubble will burst eventually, as the coffee short bubble.
Although it is very dangerous to bet against the bubbles, because you may be hurt badly I prefer not to be short in the coffee market now, but if I would be, I will start covering right now.!!
Funds are continuing to accumulate more and more shorts. The systematic trading gives them signals to do that. However, the World economy is opening and any closing would be just temporary. Outside coffee home consumption which is no more than 20%, is not going to contract as much as some people think, while coffee home consumption is increasing at a fast pace.
From now on, with world openness, I think outside coffee consumption should start increasing slowly until will increase substantially, either when the COVID 19 vaccine will come up, better effective treatment will show up, or the people will get used to living in a world with a COVID 19 with all the necessary precautions.
Unfortunately, wind bears are blowing in the coffee market now. Citibank has lower his forecast to 90 cents for this semester and prevalent some ideas of contraction in a world consumption demand. IMO this is too much exaggeration and by the way, it is not the first time I've seen CITIBANK is well wrong at its predictions.
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