Commercial Traders Holding Long Coffee Positions
Small Speculators and Funds Covering Short PositionsThe coffee market has been one of the weakest markets of 2012 with prices declining more than 25%. Commercial traders were heavy buyers on the market’s decline to the 180-190 area where the market consolidated for months until May’s decline hit all market sectors.
Commercial traders have held fast to their position with very little net change since the middle of March. It appears that they may be getting the bounce they’ve been waiting for.
I expect this is primarily a large speculator and fund driven short covering rally given the magnitude and the timing as the July contract expires. Never the less, it’s perfectly conceivable that we trade back to the bottom side of the resistance between 170-180. Our protective sell stops will be placed at the swing low of 150.10
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