Coffee Speculators Due For A Wake-Up Call?

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by Dana Lyons

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Coffee speculators have never been more short the commodity; are they about to get burned?

After enjoying a bit of a resurgence in recent years, most of the commodity complex has had a rough go of it over the past several months. And needless to say, the poor price action has taken its toll on investor sentiment. Perhaps no market provides a better example of such dour circumstances as does the coffee market.

READ  THE DEMOCRAT FAMILY. morning laugh with your coffee.

As today’s Chart Of The Day illustrates, the price of coffee (as represented by the S&P GSCI Coffee Index) just traded at its lowest level in the index’s (albeit brief) history. Significantly, the price also undercut its previous lows from 2007, 2008-2009 and 2013. And on the sentiment front, the data matches price’s gloomy performance. According to the CFTC, Speculators in coffee futures have adopted their largest net-short position in the history of the contract – by far.

READ  THE DEMOCRAT FAMILY. morning laugh with your coffee.
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