Short coffee?

Short coffee

Among soft commodities, arabica coffee futures rediscovered forward gears, rebounding 1.7% to 120.90 cents a pound for May delivery, for the first positive session in five.

Headway was helped by a stronger real, which gained 0.6% against the dollar, so boosting the value of assets in which Brazil is a major trading force.

Furthermore, bulls were encouraged by data showing a jump in open interest on Wednesday of 7,519 contracts to 230,077 contracts – fresh positions which, in a falling market, would appear to be short bets.

This provoked ideas of something of an overhang of short coffee bets, with many taken out at low prices, making them vulnerable to any rise in prices.

Brazil’s Cooxupé, the world’s largest coffee growers’ co-operative of coffee farmers, forecast that its exports of the bean will grow by 8% to 4.4m bags in 2018, bolstered by rising production.

Cooxupé’s chief executive, Carlos Paulino da Costa, told Reuters that the co-operative was expecting deliveries of 6m bags of coffee from its farmers in 2018, up from 4.7m bags last year.

Associated farmers’ total output, including coffee sold elsewhere, will reach 8.4m bags, up from 6.7m bags in 2017.

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