Coffee Traders Forum
[ Post a Response | Coffee Traders Forum ]
Re: CECAFE shipments Sep22 - 3.138.972 bags
Yes of course thatís the million dollar question! But I think for a proper answer we have to revisit the USDA June report. Since that report major adjustments have to be made to the world coffee situation. Brazil will produce 7-8 mln bags less. Colombia coffee production is down 1.7 mln bags for the last 11 months. Vietnam exports have far exceeded the usda Forecast resulting in very low ending stocks. No reason Vietnam exports will slow in the next season yet usda reduces exports and raises ending stocks to over 5.0 mln bags. Producing nations are all starting their season with no opening stocks.i could go on there too many issues! Those who are negative make a very poor case. Yes the price action the last 12 months has been difficult but trading futures is inherently difficult. I see a 12 month congestion with a continuation head and shoulder pattern developing. Unless you are very young you will not see a perfect storm like this in coffee in your lifetime. Either way we will see history being made. I should add that coffee trade has become unhedgeable only flat price and back to back trade is possible, the differential risk and the spread risk has become huge much greater than the price risk, actually the easiest trade if you need coffee is to buy futures. If you buy the December Future someone is obligated to deliver you a high quality coffee at par. Even if spreads or differentials crash you are no worse off itís a no brainer. The seller is facing a huge obstacle to deliver that coffee and make a profit.