With all of the news about stocks, currencies, energies, grains, metals and the European debt crisis, I am sure many of you missed out on some excellent, high-probable trades. I am talking about many of the “softs,” and one in particular — coffee.
Last week, September 2011 coffee opened at 266.00 and closed the week at 252.50. The daily chart below shows that ADX is currently indicating strength to the downtrend. ADX confirmed the range this market has been in since mid-May — 260-275 — finally breaking down below 260 and adding to our OTE. MACD once again has crossed below the signal line, Stochastics are oversold (remember a strong trend is developing) and look how long this market was oversold before the last correction. It could be there again. Look at the daily chart below to see when a short was recommended. These types of profits would buy a lot of Joe.
Proceed to Page 2 for the latest COT Data...
COT Data
Also, see the weekly chart below for an excellent view of the old legacy COT report and the more transparent new disaggregated COT report. Two weeks ago we saw in the legacy report that Commercials hit a 52-week high of -16,418 contracts net-short. When you look at the new report, you actually can see how the Swaps and Managed Money moved in this market. These are views that can help you catch another ride up if it were to happen again.
|
Commodity |
12-mo low |
12-mo hi |
17-Jun |
10-Jun |
|
Cattle (feed) |
-1,290 |
7,100 |
4,770 |
4,683 |
|
Cattle (live) |
-73,179 |
8,298 |
8,298 |
2,046 |
|
Hogs |
-35,979 |
21,270 |
21,270 |
19,456 |
|
Corn |
-413,915 |
119,389 |
-383,813 |
-387,283 |
|
Oats |
-7,738 |
-1,673 |
-5,477 |
-4,990 |
|
Soybeans |
-203,260 |
29,118 |
-91,457 |
-112,280 |
|
Soybean meal |
-90,487 |
-32,915 |
-62,323 |
-66,035 |
|
Soybean oil |
-117,444 |
32,394 |
-68,981 |
-87,714 |
|
Wheat |
-32,577 |
70,879 |
26,770 |
15,534 |
|
Orange juice |
-20,205 |
-6,588 |
-19,193 |
-20,205 |
|
Coffee |
-47,729 |
-16,418 |
-19,265 |
-16,418 |
|
Cocoa |
-41,808 |
8,586 |
-7,407 |
-6,136 |
|
Sugar |
-221,694 |
-104,595 |
-138,295 |
-123,748 |
|
Cotton |
-69,857 |
-12,970 |
-36,752 |
-34,758 |
|
British pound |
-66,435 |
62,116 |
-18,820 |
-7,171 |
|
Canada dollar |
-115,190 |
-13,109 |
-48,737 |
-36,708 |
|
Euro FX |
-124,855 |
83,486 |
-64,549 |
-59,176 |
|
Japanese yen |
-52,533 |
76,983 |
-19,623 |
-12,461 |
|
Swiss franc |
-42,387 |
18,682 |
-27,980 |
-29,746 |
|
US dollar index |
-23,745 |
14,003 |
-9,085 |
-5,517 |
|
Mexican Peso |
-140,414 |
-14,488 |
-52,212 |
-96,395 |
|
Australian dollar |
-110,025 |
-10,793 |
-83,427 |
-79,855 |
|
S&P 500 |
-88,893 |
33,981 |
-44,570 |
-55,890 |
|
T-note -10 yr |
-74,761 |
229,611 |
98,874 |
62,061 |
|
T-bond -30 yr |
-43,324 |
88,803 |
47,879 |
6,676 |
|
Eurodollar |
-1,179,414 |
81,781 |
-408,407 |
-392,482 |
|
Crude oil |
-319,669 |
-25,439 |
-197,975 |
-207,579 |
|
Heating oil |
-66,097 |
7,568 |
-49,892 |
-45,946 |
|
RBOB Gasoline |
-85,987 |
-10,453 |
-68,730 |
-62,224 |
|
Natural gas |
108,160 |
228,910 |
108,160 |
109,696 |
|
Copper |
-36,201 |
1,793 |
-8,926 |
-8,548 |
|
Gold |
-302,740 |
-193,197 |
-237,429 |
-247,684 |
|
Platinum |
-34,909 |
-15,759 |
-27,318 |
-27,239 |
|
Silver |
-65,413 |
-33,224 |
-33,224 |
-33,328 |
Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.
Proceed to Page 3 for this week's detailed fundementals charts...
Fundamentals
Fundamental outlook — Bull market correction — Coffee prices are correcting lower from their 14-year high on favorable weather for Brazil’s ongoing harvest. Coffee production in 2009/10 fell -4.5% y/y to 122.9 mln bags (ICO), but production should rebound to +8.2% y/y 133 mln bags in 2010/11 Brazil’s 2010/11 (July-June) production will rise 23% y/y to 55.3 mln bags on a favorable two-year cycle (USDA).
Coffee supply/demand
USDA: 2010-11 world coffee production was a record 139.7 mln bags (+11% vs 2009-10’s 125.7 mln bags); 2010-11 consumption was 131.5 mln bags (+2.2% vs 2009/10’s 128.7 mln bags); 2010-11 world ending stocks was at 36.3 mln bags (+16% vs 2009-10’s 31.3 mln bags); exports were 103.4 mln bags (+5.2% vs 2009/10’s 98.3 mln bags); 2010-11 stocks/use was at 27.6% (vs 2009-10’s 24.3%).
Have a prosperous trading week.
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