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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4884)	10/17/2001 1:15:22 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

the Ewave debate csf.colorado.edu

To: John Pitera who wrote (4884)	10/18/2001 4:02:07 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

speaking of deflation... Coffee at it's lowest levels since the contract was launched in NY in 1972 and the CRB index really looks like it's falling off of cliff on this monthly chart futures.tradingcharts.com October 15, 2001 futures.tradingcharts.com host.wallstreetcity.com -------------------------------------------------------------------------------- Commodities Coffee Futures Decline To Lowest Level Ever By MARA LEMOS Dow Jones Newswires After rising early, coffee prices slumped to the lowest level since the futures contract was launched in 1972 at the New York Coffee, Sugar & Cocoa Exchange. The price of the most active December contract fell 0.85 cent, or nearly 2%, to 43.85 cents a pound in the busy, abbreviated 90-minute session. An estimated 5,919 lots changed hands. Though traders had predicted a slight bounce in prices for the session, early gains were short lived, as coffee producers sold at the session's highs. This quickly turned speculators who bought early in the session into sellers, and they were joined by large commodity funds. Soon, coffee was marching into uncharted territory. The December contract hit as low as 43.75 cents, falling through the bottom of 45.25 cents reached in 1975. Market watchers say there seems to be more room to the downside, given that any price gains will be met by producers' hedge sales. Brazil, the world's leading coffee grower, has been an active seller amid expectations of a bountiful harvest next season in that country. Coffee's downward move in recent weeks has been accompanied by a slight increase in open interest, or the number of outstanding contracts, which could be interpreted as meaning that commodity funds continue to add to their large short positions, said Rodrigo Costa, a broker with the Latin American desk of Fimat USA Inc., of New York, referring to bets that prices will fall. "The market has seen only very short-lived moves to the upside, and the open interest is growing. Although from a technical viewpoint we could see a recovery [in prices], it will only be a recovery if it moves to above 46 cents." Technical analysis of markets uses historical price patterns rather than supply-and-demand fundamentals to gauge where prices are headed. For coffee, the next technical support level is 42.40 cents, though many observers have resigned themselves to the fact that the bears aren't done with coffee yet. Many traders expect coffee prices will trickle down to 42 cents, or even to 40 cents. The market has been overwhelmed by excess supplies and bulging inventories in importing nations (though stockpiles are beginning to decline slowly in the U.S., the world's leading coffee consumer). Monday, it was announced that coffee stocks at warehouses registered with the Green Coffee Association totaled 5,793,055 million 60-kilogram bags at Sept. 30, down 117,047 bags from Aug. 31. This is the sharpest drop in U.S. inventories since December, but analysts expect the market to be indifferent to it when it reopens Tuesday. Still, some slowing of the flow of supply may appear soon, said Judy Ganes, executive director of research and news for InterCommercial Markets, an Internet-based commodities trading platform. In a study to be released Wednesday, Ms. Ganes concludes that the pace of coffee exports from Brazil of more than two million bags a month can't be sustained much longer