Best Thread COFFEE - The next big bull?
JKLondon -
Coffee Arabica is grown mainly in Brazil/Central America/Colombia, priced in US cents/pound, listed on NYBOT, New York.
Coffee Robusta is grown in Vietnam, East Africa, priced in $/tonne, listed on LIFFE, London.
The markets are factoring in increasing tightness in the Arabica market due to adverse weather, neglect of farms, stock drawdown, etc.
Robusta coffee is not so tight, but there are emerging problems in Vietnam, due to drought and floods.
For further information on the fundamental difference between the 2 Coffees (growth, quality, use , etc) , go to the ICO website : (int. Coffee Org.)
www.ico.org
Coffee Arabica is grown mainly in Brazil/Central America/Colombia, priced in US cents/pound, listed on NYBOT, New York.
Coffee Robusta is grown in Vietnam, East Africa, priced in $/tonne, listed on LIFFE, London.
The markets are factoring in increasing tightness in the Arabica market due to adverse weather, neglect of farms, stock drawdown, etc.
Robusta coffee is not so tight, but there are emerging problems in Vietnam, due to drought and floods.
For further information on the fundamental difference between the 2 Coffees (growth, quality, use , etc) , go to the ICO website : (int. Coffee Org.)
www.ico.org
ok will do - although (without looking at the charts) isnt there are argument that they will converge over the "long-run" to a certain level. Hence if it has underpeformed and there is this convergence (again ive not seen the chart..just thinking out aloud!) ..then one trade might be a spread between the two ?
Thanks, As for COT, I think you are right on who are commercials. In Grains & Softs they are the Buyers. In metals, they are probably the SELLERs. In coffee, I suspect the commercials are the large Buyers like Douwe Egberts, Nestle etc, etc, whereas the sellers are small farmers in developing countries.gene said:
Guess who is the best informed party in the market? Same applies to Cocoa.
Now that doesn't mean that they are always right. DaveT pointed that out in an earlier post that in earlier Coffee rallies, the Commercials had to cover shorts. Check out his post
NYBOT coffee stocks down AGAIN on the month. (see news release below)
It is said a bull market needs feeding every day. Plenty of daily 'food 'coming up....
DJ US Nov Green Coffee Stocks Dn 234,367 Bags To 5.166M Bags
Total exchange
and non-exchange Difference
Nov 30 Oct 31
Total New York 2,011,661 2,058,753 -47,092
Total New Orleans 1,370,388 1,430,216 -59,828
Total Jacksonvile 118,000 137,000 -19,000
Total Miami 902,484 981,134 -78,650
Total Houston 340,268 343,348 -3,080
Total Laredo 72,757 85,421 -12,664
Total San Francisco 300,755 327,986 -27,231
Total Los Angeles 2,570 2,570 0
Total Norfolk 41,613 28,219 13,394
Total Port Everglades 0 0 0
Total Philadelphia 5,759 5,975 -216
Total U.S. 5,166,255 5,400,622 -234,367
The data furnished is derived from the local warehousemen in the
listed port areas. The compilation has been made by the Green Coffee
Association, Inc which has no reason to believe the data is not reasonably
accurate, but no assurance is given or representation made as to the
accuracy or completeness of all or any of the material.
It is said a bull market needs feeding every day. Plenty of daily 'food 'coming up....
DJ US Nov Green Coffee Stocks Dn 234,367 Bags To 5.166M Bags
Total exchange
and non-exchange Difference
Nov 30 Oct 31
Total New York 2,011,661 2,058,753 -47,092
Total New Orleans 1,370,388 1,430,216 -59,828
Total Jacksonvile 118,000 137,000 -19,000
Total Miami 902,484 981,134 -78,650
Total Houston 340,268 343,348 -3,080
Total Laredo 72,757 85,421 -12,664
Total San Francisco 300,755 327,986 -27,231
Total Los Angeles 2,570 2,570 0
Total Norfolk 41,613 28,219 13,394
Total Port Everglades 0 0 0
Total Philadelphia 5,759 5,975 -216
Total U.S. 5,166,255 5,400,622 -234,367
The data furnished is derived from the local warehousemen in the
listed port areas. The compilation has been made by the Green Coffee
Association, Inc which has no reason to believe the data is not reasonably
accurate, but no assurance is given or representation made as to the
accuracy or completeness of all or any of the material.
gene
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Here's a couple of lines I pulled from Dow Jones Newswires:
"The decline in the green stocks was about double what some of us were
looking for," a desk trader said.
Commercials have a massive short position on Nybot and the market is moving
against them. Funds have a record long position, but can add to it as open
interest grows.
"The decline in the green stocks was about double what some of us were
looking for," a desk trader said.
Commercials have a massive short position on Nybot and the market is moving
against them. Funds have a record long position, but can add to it as open
interest grows.
Coffee Weekly Chart studies :
---------------------------------------
It is interesting to compare New York Coffee weekly chart, with London Coffee weekly chart (see below)
Each chart has a different technical analysis, (different patterns ,etc), but both appear to give the equivalent upside objectives.
1) NY Coffee has broken out of an Ascending Triangle AND a long-term weekly channel. Objectives are 116-118, which is resistance near the top of the July 2000 spike high.
2) London Coffee is forming a Bull Flag, the breakout of which would give an objective of 1000, which is also resistance near the top of the July 2000 spike high.
On the London chart, I have also shown previous bull flags, which duly met their objectives and formed resistance there.
Here are the charts:
---------------------------------------
It is interesting to compare New York Coffee weekly chart, with London Coffee weekly chart (see below)
Each chart has a different technical analysis, (different patterns ,etc), but both appear to give the equivalent upside objectives.
1) NY Coffee has broken out of an Ascending Triangle AND a long-term weekly channel. Objectives are 116-118, which is resistance near the top of the July 2000 spike high.
2) London Coffee is forming a Bull Flag, the breakout of which would give an objective of 1000, which is also resistance near the top of the July 2000 spike high.
On the London chart, I have also shown previous bull flags, which duly met their objectives and formed resistance there.
Here are the charts:
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2 Bar Charlie
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Can't see it.
Coffee has been down in the dumps for years now and cant seem to break the 1.00 mark (or atleast stay there). When it hits 1.50 then I'll be interested.
Coffee has been down in the dumps for years now and cant seem to break the 1.00 mark (or atleast stay there). When it hits 1.50 then I'll be interested.
Coffee COT situation
-----------------------------
Below is a long-term Monthly continuous plot of the COT Commerical and Large Spec relationship.
I'm focusing on the scenario in 1994 and 1997 bull markets, and comparing them with the current situation.
In both 1994 and 1997 bull runs:
1) Commericals were at extreme net short levels at the beginning of the rise, but HAD TO COVER as the price climbed steeply, gradually reducing to flat over the months.
2) Large Specs, on the other hand, were at record net long levels at the beginning of the rise, but gradually reduced their net long position as the price rose.
I've highlighted this on the chart below.
-----------------------------
Below is a long-term Monthly continuous plot of the COT Commerical and Large Spec relationship.
I'm focusing on the scenario in 1994 and 1997 bull markets, and comparing them with the current situation.
In both 1994 and 1997 bull runs:
1) Commericals were at extreme net short levels at the beginning of the rise, but HAD TO COVER as the price climbed steeply, gradually reducing to flat over the months.
2) Large Specs, on the other hand, were at record net long levels at the beginning of the rise, but gradually reduced their net long position as the price rose.
I've highlighted this on the chart below.
Attachments
Newport wrote:
I would say so. If you look closely there is a similar convergence just proir to the 1997 set-up.
Also , the recent relative extremes of both COT levels historically (and violent swings in those positions over the last 2 years) is another example of pressure building up for an upward move , IMO.
I would say so. If you look closely there is a similar convergence just proir to the 1997 set-up.
Also , the recent relative extremes of both COT levels historically (and violent swings in those positions over the last 2 years) is another example of pressure building up for an upward move , IMO.
Gene -
The lower volumes over the Christmas period could produce some large one-day moves, IMO.
Position-squaring could mean Funds booking SOME profits,(end-of-month), but also 'positioning' long for further upward moves early in the new year.
The growing optimism that 2005 could be 'the year of the Coffee Bull Market' will keep upward pressure on the price, IMHO.
It has long been observed that markets often make a substantial move just before or just after a holiday.
The lower volumes over the Christmas period could produce some large one-day moves, IMO.
Position-squaring could mean Funds booking SOME profits,(end-of-month), but also 'positioning' long for further upward moves early in the new year.
The growing optimism that 2005 could be 'the year of the Coffee Bull Market' will keep upward pressure on the price, IMHO.
It has long been observed that markets often make a substantial move just before or just after a holiday.
COMMODITY STRATEGIST - COFFEE MAY RISE ON BRAZIL, BARCLAYS SAYS
------------------------------------------------------------------------------------------------------------
Dec. 20 (Bloomberg) -- Coffee prices, now at a five-year high in New York, may rise further as the weakening dollar prompts growers in top producer Brazil to hold onto their beans, Barclays Capital said. Cocoa futures may be damped by a surplus.
``The overall situation of the coffee market, especially in the short term, looks bullish,'' London-based analysts including George Hopley and Paul Horsnell said in a Dec. 17 report.
Coffee for March delivery rose 9 percent last week in New York as the International Coffee Organization said global demand will outstrip supply into 2006. Prices for higher-quality Arabica beans have surged more than 60 percent in the past year on expectations a cyclical decline in Brazil's production will force processors to dig deeper into inventories.
``A price rally under normal circumstances would have prompted a load of deliveries out of Brazil,'' Barclays said. ``However, recent developments in the foreign exchange market limited the real level of the price hike benefits to be translated monetarily to producers.''
The Brazilian real has gained 6.2 percent against the U.S. dollar this year, cutting profit for growers who pay costs in local currency and sell their coffee for dollars. The real reached 2.6925 against the dollar on Dec. 3, the highest since August 2002. It traded today at 2.7120 to the dollar.
The lack of producer selling has spurred roasters to draw down inventories, Barclays said. Warehouse stockpiles tracked by the Green Coffee Association have declined 11 percent since June. Coffee, Sugar & Cocoa Exchange inventories have dropped 10 percent in the past three months.
World Output
Global coffee production will fall as low as 106 million bags in 2005-2006 from 114 million in the current crop year, the London-based International Coffee Organization said last week. Brazil's output will drop by as much as a fifth, to between 30.7 million bags and 33 million bags, the Ministry of Agriculture estimated on Dec. 10. A bag weighs 132 pounds, or 60 kilograms.
Coffee for March delivery closed at $1.0430 a pound on Dec. 17 on the New York Board of Trade, the highest since December 1999. Coffee futures touched a 30-year low of 41.5 cents in October 2001. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.
------------------------------------------------------------------------------------------------------------
Dec. 20 (Bloomberg) -- Coffee prices, now at a five-year high in New York, may rise further as the weakening dollar prompts growers in top producer Brazil to hold onto their beans, Barclays Capital said. Cocoa futures may be damped by a surplus.
``The overall situation of the coffee market, especially in the short term, looks bullish,'' London-based analysts including George Hopley and Paul Horsnell said in a Dec. 17 report.
Coffee for March delivery rose 9 percent last week in New York as the International Coffee Organization said global demand will outstrip supply into 2006. Prices for higher-quality Arabica beans have surged more than 60 percent in the past year on expectations a cyclical decline in Brazil's production will force processors to dig deeper into inventories.
``A price rally under normal circumstances would have prompted a load of deliveries out of Brazil,'' Barclays said. ``However, recent developments in the foreign exchange market limited the real level of the price hike benefits to be translated monetarily to producers.''
The Brazilian real has gained 6.2 percent against the U.S. dollar this year, cutting profit for growers who pay costs in local currency and sell their coffee for dollars. The real reached 2.6925 against the dollar on Dec. 3, the highest since August 2002. It traded today at 2.7120 to the dollar.
The lack of producer selling has spurred roasters to draw down inventories, Barclays said. Warehouse stockpiles tracked by the Green Coffee Association have declined 11 percent since June. Coffee, Sugar & Cocoa Exchange inventories have dropped 10 percent in the past three months.
World Output
Global coffee production will fall as low as 106 million bags in 2005-2006 from 114 million in the current crop year, the London-based International Coffee Organization said last week. Brazil's output will drop by as much as a fifth, to between 30.7 million bags and 33 million bags, the Ministry of Agriculture estimated on Dec. 10. A bag weighs 132 pounds, or 60 kilograms.
Coffee for March delivery closed at $1.0430 a pound on Dec. 17 on the New York Board of Trade, the highest since December 1999. Coffee futures touched a 30-year low of 41.5 cents in October 2001. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.
