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Softs (Fundamentals)
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Created: by myrrdin Attachments:10

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Softs (Fundamentals)

  #31 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
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ElChacal View Post
I bought yesterday one (1) "BJO" (which is a Coffee ETN) ITM $37 Call and sold (1) BJO OTM $35 Put as a test. I closed positive yesterday and it went up big time today. I wish I had gone larger, but the Coffee contract is simply too big for me. Is it $35k/point? Phewww... Is it the same size with an ATM Call (~50 delta) or is it reduced?

COT is indeed extreme bullish and I think I am starting to read it better now. The downtrend is probably still on, but obviously no risk with this very small trade.

@myrrdin what are your views on Soybeans? It seemed the down swing was about to end but I feel it is resuming back and going to the 814 area...

Regards.

Coffee currently trades around 100. One point corresponds to US$ 375.

The KCH C1.05 option, which is approx. at the money, closed at 7.59 yesterday. (I moved my options to the March contract, as expiry of the December contract gets close.)

There are elections in Brazil on 7th of October. As there is uncertainty about the further development of the Brazilian Real some shorts begin to liquidate. Furthermore, there are first news about a coffee crop a bit smaller than expected in South America 2019 (off-year).

Please see my comment on Soybeans in the "Grains & Beans" thread.

Best regards, Myrrdin


Last edited by myrrdin; September 29th, 2018 at 06:32 AM.
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  #32 (permalink)
Market Wizard
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I hold a position in outright coffee futures for months, which got unter water recently. I added to the position at a price below 100, and, thus meanwhile the position is positive. I intend to hold it for a while, as I expect the coffee price to move above 130 in the next couple of months.

Reasons for the recent sharp price move were extremely bullish COT data, results of the recent elections in Brazil and, consequently, rise of the Brazilian Real, and smaller weather issues in various coffee areas.

Additionally I hold some some short CCH P1900 options (see thread "Diversified Option Selling Portfolio").

I held some long SBH futures, but, unfortunately, sold them again too early with a very small profit.

Best regards, Myrrdin

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  #33 (permalink)
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ElChacal's Avatar
 
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I got stopped out today on a long OJ. It was bad analysis on my part. I was trying to catch a reversal and the risk/reward looked attractive. There is still room to the downside.

I think both Cotton and Lumber seem to have bottomed out. Any thoughts on those 2 @myrrdin ?

Also, Sugar seems to maintain its uptrend. I would like to see a reversal and try to get in.

Now I just need to find an ETF for all those. LOL.

My (3) BJO Calls (coffee) are looking good. ~$750 unrealized but still holding.

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  #34 (permalink)
Market Wizard
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ElChacal View Post
I got stopped out today on a long OJ. It was bad analysis on my part. I was trying to catch a reversal and the risk/reward looked attractive. There is still room to the downside.

I think both Cotton and Lumber seem to have bottomed out. Any thoughts on those 2 @myrrdin ?

Also, Sugar seems to maintain its uptrend. I would like to see a reversal and try to get in.

Now I just need to find an ETF for all those. LOL.

My (3) BJO Calls (coffee) are looking good. ~$750 unrealized but still holding.

The OJ price at this time of the year depends a lot on the weather forecasts for Florida. Frost or no frost. In this year, the strength of the brazilian Real might help the OJ price, as it does for KC. I do not intend to trade OJ in the near future.

Unfortunately I missed the move downwards of LB. I tried 2 or 3 times, but was stopped out. Usually a lot of lumber is sold to China, and it will depend on the negotiations between Mr. Trump and China when these exports will grow again. The rising interest rates are not helpful for the house building industry. Thus, I do not intend to buy lumber in the near future in spite of the promising seasonal chart.

Regarding CT: COT data looks bearish to neutral to me. Weather ist bullish, there were losses due to the recent hurricane. But CT price does not move. If the price of a commodity does not move upwards on bullish news this is not a good sign. A lot depends on the USD, and I am not able to predict in which direction it will move. In short words: There are currently too many uncertainties for me to trade CT.

Sugar looks good to me; COT data still gives room for more upwards. Unfortunately this train has left the station without me.

Regarding softs, I am happy with my long positions in KC (outright futures and long calls) and CC (short puts).

Best regards, Myrrdin

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  #35 (permalink)
Market Wizard
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PS: If you are looking for a free daily newsletter that gives good information on cotton: "This week in Grain" by John Payne from Daniels Trading is available for the public. It gives information on Corn, Wheat, Soybeans, and Cotton. You can subscribe to it via the homepage of Daniels Trading.

Best regards, Myrrdin

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  #36 (permalink)
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Short Sugar

My view on sugar has been that it is temporarily overbought and I believe in a short-term minor correction/pull-back.

So on 18-Oct, I sold short the Mar'19 future when it was at 0.1382 and bought Nov call (strike 0.14) for -0.0044 as insurance.

Today the trade is showing a nice profit as the future has dropped to 0.1316. Will wait a little more before I close.


Last edited by zxcv64; October 31st, 2018 at 04:26 PM.
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  #37 (permalink)
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I agree with you holding a Sugar Put and 3 BJO (coffee) puts. Both trades looking good.

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  #38 (permalink)
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Cocoa

Cocoa has been rising for the last 8 trading days. RSI is close to 80, and although Hightower/fundamentals are bullish, I cannot help but think that a temporary pull-back is due. So, with that in mind I sold short the July contract at 2375 and bought a protective call option.

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  #39 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
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zxcv64 View Post
Cocoa has been rising for the last 8 trading days. RSI is close to 80, and although Hightower/fundamentals are bullish, I cannot help but think that a temporary pull-back is due. So, with that in mind I sold short the July contract at 2375 and bought a protective call option.

COT data is bullish, Seasonals are not reliable this year for cocoa, Supply & Demand is bullish.

I am happy with my put options which I had sold some time ago.

I definitely will not sell CC calls in the near future.

Good luck !

Best regards, Myrrdin

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  #40 (permalink)
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+1 with Myrrdin I have the next three contracts with selling put options (vertical spread) on cocoa US

Is this file the most active to discuss softs and therefore coffee?

Are you still so confident with KCU19 P100 Myrrdin? If you are I can consider taking P95 or P90 but August is not so good for Coffee in general no?
I have KCN19 P95 and P100 and I already lost the premiums trying to protect my positions with futures (in less than 5 hours). With the increase of today that I was expecting yesterday but not to this level, I am between 2 chairs: thinking about shorting around 98 or 96 to reach 90 or 92 or maybe going long from 98. I think I will be paralysed up to 103...


Last edited by Sagal; April 3rd, 2019 at 05:55 PM. Reason: precision
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