To keep up with soft market:
"Following the price action of the past week coffee traders have now developed into two basic camps, neither of which believes that the price will stay close to $1.60. I believe that while prices will certainly move up (I've pitched my tent among the bulls,) a key element fueling the bullish camp is the benefit of the flow of money. This is not a subject mentioned often enough and yet it seems responsible in a large part to premier rallies seen in commodities the past two years. The bearish camp seems more focused on warehouse stocks, the Brazilian harvest and the potential for more aggressive producer selling. In some respects the current coffee market reminds me of similar bull moves seen over the past couple of years and it might be worth reviewing moves made in cotton, crude and sugar. One major point is that once those bullish moves were over, and prices retreated, they did so with the help of gravity and moved fast. I don't expect that time has come for coffee values yet and still look for further upside.
Cotton prices are being impacted by the excellent growing conditions for the new crop. That means that the bulls who believe that prices have further to go on the upside will need help. Yes, current supplies remain tight as the transition from old crop to new takes place, but I do not expect any breath taking moves over the near term. Same type of sideways price action expected in juice.
Cocoa ought to provide a reasonable opportunity this week for bears like me to acquire some puts at a reasonable level. I do not have bullish feelings at all towards cocoa and strongly believe that demand is not going to live up to expectations. Sugar on the other hand offers a trading range potential between 15 and 17 basis the October contract."
By Pitguru experts
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