Coffee Attacks The Cold
Reeling in volatile trade, coffee logged its sixth move of more than 10% in seven days, taking
out the May record to score a new two-month high. Meteorological reports said
temperatures dropped to freezing in the major growing states of Minas Gerais and
Sao Paulo, Brazil. Coffee has risen and fallen precipitously in recent
days on reports saying a cold front would hit, miss and then hit the primary
growing regions. Brazil is the world’s largest grower of coffee.
Coffee trees from the Parana region were also said to be
effected by the frost. Forecasts for more intense cold Tuesday and Thursday
further contributed to Monday’s higher prices. But don’t rule out the downside
in this market. Reports about the extent of crop damage from coffee cooperatives
in the growing regions are unconfirmed and the Commitment-of-Traders report is
still in a classic bearish set-up with fund traders net-short and small traders
shown to be still holding on to net long positions. September coffee closed 9.70
higher at 101.05.
From the Momentum-5
List, sugar rallied new highs, adding .46 to 9.66 gapping above a recent
consolidation-on-highs pattern. Traders bought sugar after interpreting Friday’s
Commitment of Traders report bullishly. The COT showed that there were fewer
fund and small speculators holding net long positions, implying the contract
still has room to add more long positions.
Several contracts on both the Momentum-5
and
Implosion-5 Lists, including
sugar, made good on my Off
The Blocks method, which you may wish to review by going to TradingMarkedts.com’s Futures-Education-Lessons-Indicators
section.
In other softs and fibers trading, both October and December
cotton
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weather related concerns. December ended 3.00 higher to close at 62.49.
Stock index futures registered on both the Momentum-5
and
New 10-Day Highs
Lists, and finished mixed after breaking new multi-month high ground.
September S&P futures
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the1533-level to end at a slight loss of 2.00 at 1522.00.
Dow futures
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close at 10,880.00. Nasdaq 100 futures
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in heavyweights Qualcomm and JDS Uniphase which propelled the September contract
to a gain of 32.00 to close at 4110.00.
Moderating temperatures and an OPEC promise to supply an
additional 500,000 barrels of crude oil a day, deflated the energy sector
Monday. September crude oil
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PowerRating) fell .57 to 30.83,
unleaded gasoline
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heating oil
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natural gas
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PowerRating) dropped by .148 to close at 4.002.
Better-than-expected weather in the grain belt has took corn,
wheat and soybeans to new contract lows. The grains are filling out the Implosion-5 List.
The Commitment-of-Traders report showed that speculators are still holding onto
significant net long positions in spite moves to new contract lows. In
soybeans, the COT is bearish and shows small traders are still holding net long
positions of over 18,000 contracts. Grain contracts moved an average of 1.25%
lower in Monday’s session.