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Softs (Fundamentals)
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Created: by myrrdin Attachments:10

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Softs (Fundamentals)

  #41 (permalink)
Strasbourg, France
 
 
Posts: 74 since Mar 2019
Thanks: 21 given, 58 received

Another word about COT and coffee, we are far from the maximum short positions from the speculators, I wouldn't rely on that. I have to say as well that on the fundamental or on the weather or on the stocks there is nothing bullish...at all. I was relying of some weather anxiety for June but so far nothing...
Let's see if the screenshot is working (21% it was around 0% between July and September of last year)

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Softs (Fundamentals)-coffee.png  
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  #42 (permalink)
Market Wizard
Linz Austria
 
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Sagal View Post
+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...

I am still optimistic that coffee prices will be above 100 earlier or later.

The crop of last year was huge, and this keeps prices down.

The crop of this year will be significantly smaller, there is an off-year, weather was far from perfect during blooming, and weather ist far from perfect for the Vietnam coffee crop.

The question is: When will the focus shift from old crop to new crop ?

An issue of uncertainty is the Brazilian currency.

For such trade it is important to keep the lot size at a moderate level to be able to stay in the trade without major losses.

Best regards, Myrrdin

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  #43 (permalink)
Market Wizard
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Sagal View Post
Another word about COT and coffee, we are far from the maximum short positions from the speculators, I wouldn't rely on that. I have to say as well that on the fundamental or on the weather or on the stocks there is nothing bullish...at all. I was relying of some weather anxiety for June but so far nothing...
Let's see if the screenshot is working (21% it was around 0% between July and September of last year)

I use the absolute figures for interpreting the COT data.

The short position of Large Specs has only once since 2006 (I do not have older data) been larger than now - that was in September of 2018. What worries a bit me is the extremely large long position of Small Specs.

Open interest is the highest since 2006, which makes me doubt that more fresh shorts will enter the market.

Best regards, Myrrdin

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  #44 (permalink)
Strasbourg, France
 
 
Posts: 74 since Mar 2019
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Agree with your observation, my point is precisely that it is not a recent minimum
https://www.home.saxo/insights/content-hub/articles/2019/04/03/starbucks-reaching-limit-of-arabicas-decline


Last edited by Sagal; April 4th, 2019 at 05:34 PM. Reason: better link
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  #45 (permalink)
Legendary Market Wizard
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Sagal View Post
Ole_S_Hansen

Interesting Twitter follow. Thank You.

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  #46 (permalink)
London, UK
 
 
Posts: 73 since Jan 2018
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KC - grinding downwards

I know there are at least a couple of guys here who are short KC puts, and I would like to get your opinion on what you make of the coffee downtrend. I appreciate that fundamentals of oversupply in Brazil combined with the Brazilian currency effect are causing this gentle decline. My question is more a case of what action/preventative measures will you take to handle the situation, esp. if you have any short puts which are in the money? Would you roll your puts? Cut your loss and move on?

(Disclaimer - I am long the July future combined with a long protective put, so the loss is defined and known.)

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  #47 (permalink)
Market Wizard
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zxcv64 View Post
I know there are at least a couple of guys here who are short KC puts, and I would like to get your opinion on what you make of the coffee downtrend. I appreciate that fundamentals of oversupply in Brazil combined with the Brazilian currency effect are causing this gentle decline. My question is more a case of what action/preventative measures will you take to handle the situation, esp. if you have any short puts which are in the money? Would you roll your puts? Cut your loss and move on?

(Disclaimer - I am long the July future combined with a long protective put, so the loss is defined and known.)

I sold my outright futures some time ago, and intend to buy them back on a clear turnaround. I still hold the short KCU P1.00 .

In case there is no move upwards within the next couple of weeks, I intend to roll the position into December (Z).

I expect coffee price to move upwards at latest in August / September before the blooming period in Brazil.

This trade shows how important it is to keep positions at a moderate size.

Best regards, Myrrdin

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  #48 (permalink)
Strasbourg, France
 
 
Posts: 74 since Mar 2019
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I am more targeting a short put option for November (I think price will go up at one point of time and I am ready at anytime but I think more September to December) if I can have a short put option at 82.5 it would be fine (and I will take two in this case). Then I will probably go full speed with long futures as well at the same time.
For the time being it is not good for me (I exited my short put option June at 100...kept the one at 95) but while switching my strategy I opened yesterday two short futures. Concerning Robusta I will have another appointment with this one at another time I will concentrate on Arabica (one robusta spread is down, the other spread on 19 June will be probably the same way, if I can get rid of the long part for a good price I will and I will keep the long put option in this case)

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  #49 (permalink)
Market Wizard
Linz Austria
 
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Posts: 1,544 since Nov 2014
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I currently hold long futures (and in the case of coffee short put options) in coffee, sugar, and orange juice.

For all these commodities COT data is bullish.

Prices of all these commodities are close to round number supports (KC 1, SB 10, OJ 1).

Seasonals für sugar are bullish after early June for the most recent 15 and 30 years (not 5 years), and the chart has followed the seasonal chart nicely since October 2018. (I did not check longer.)

Seasonals have a short bullish phase in the second half of May.

Seasonals of Orange Juice are quite volatile and show a bullish tendency into July.

There are several fundamental arguments to be long coffee (off-year in 2020 in Brazil, blooming period in Brazil as a high risk period, and reduced Vietnam crop in 2019 due to weather problems), sugar (recent weather problems in several production areas), and orange juice (potential of hurricanes in summer and frost in winter). It seems to me that these risks currently are not priced.

Best regards, Myrrdin

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  #50 (permalink)
Strasbourg, France
 
 
Posts: 74 since Mar 2019
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Good to know your positions Myrrdin.
I am short in OJ (OJU19) after having lost my bet on a short put 110 (too much supply not enough demand) and looking forward to increase short position if prices touches 112. COT importance is low and particularly for OJ.
Ready to go with any waves for Coffee C in any direction (I closed one of my 2 shorts today but ready to reopen it or ready to close the other one and let my short put 95 be in the money and ready to take some long positions as well).
I think it may go to 95 or 98 or even 102 but then will go back to 88-85 up to end of July/August or will return to 88 in the next days. Basically Coffee C is my main objectives up to the end of the year and probably next year as well where I expect it around 90-100. I can quit all my swing trading and stay with Coffee C...
Cocoa still weakly bullish with short put.
No opinion on Sugar and no opinion anymore on Cotton.

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