Coffee Traders Forum
[ Post a Response | Coffee Traders Forum ]
Posted by Tango
on August 12, 2020, 10:46 am
In the quest to understand warehouse stocks, July 1, 2020 was randomly chosen to compare to the latest report. The reason for this is to show that stocks were being withdrawn way before the pandemic, meaning that present day withdrawals are not likely related to it. With low interest rates and a high supply that we have, it is surprising that coffee is not going into the warehouses rather than being withdrawn. The reason for the high withdrawals day after day is puzzling. Maybe there was an increase in carrying costs by ICE that we are not aware of? Possibly as Hubblerock stated it is convenient to pull stocks out of warehouses rather than transporting them. Still, when stocks are depleted, what then? We had the same scenario in 2015, where stocks and prices were both dropping. Ultimately, the market tells us what reality is. In addition to the physical market, which is very relevant, we have technicals and the COT/OI. The combination of the three factors is what is more important than each.
Presently, the OI is increasing as Sept OI drops. Option expiration is Friday and the roll is taking place. It appears that there is new buying and new selling as the dominant factors. Funds are selling new. Looking at the forward depth of market, there are bids present beginning in May21 and the market is holding as it approaches 110.00, for now. It appears, based on past performance, that prices will revert higher eventually. For now pressure prevails and bids are present. 2013 camaro ss 0 60