Hot And Cold Flashes
In its sixth move of more than 10% in seven days, coffee is up sharply again, reeling from contradicting reports about a possible freeze in coffee-growing regions of Brazil, the world’s largest producer.
The September contract rocketed up and hit a new two-month high after meteorological
reports said temperatures hit freezing levels in the major growing states of Minas
Gerais and Sao Paulo. Coffee trees from the Parana region were also said to be affected by frost.
Forecasts for more intense cold Tuesday and Thursday are also contributing to
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 holding on to net long
positions. Coffee is currently trading 9.65 higher at 101.00.
From the Momentum-5
List, sugar is rallying to new highs and has added .39 or 4.25%, gapping
above its recent consolidation-on-highs pattern.Â
Stock index futures are extending rallies and making good on
both Momentum-5 and
New 10-Day High readings. Both of these contracts have also provided entries
in Off The
Blocks set ups.Â
Better-than-expected weather in the grain belt has taken
corn, wheat and soybeans to new contract lows. All three contracts are on the
Implosion-5 List. The
Commitment-of-Traders report showed that speculators are still holding onto
significant net long positions in spite of 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.Â
Do you have a follow-up question about something in this column or other questions about trading stocks, futures, options or funds? Let our expert contributors provide answers in the TradingMarkets Question & Answer section! E-mail your question to questions@tradingmarkets.com.
For the latest answers to subscriber questions, check out the Q&A section, linked at the bottom-right section of the TradingMarkets.com home page.