by Dana Lyons
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.
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.