The opening prints in London and New York proved to be the high for the day with N.Y. having the double whammy of opening with a gap lower. Ultimately the market proceeded to trade 550 points lower as macro forces weighed on the commodity complex and found support just ahead of the 140 strike as short term specs took advantage of one week lows. Action was mainly spec related, while roasters, when looking at the COT commercial long position as a proxy have their lowest cover since the end of 2014, largely stood aside. Funds have added net 36,000 lots of longs since the end of May through the 28th of June and judging by the action over this past week likely have continued to increase their long exposure. The move in the coffee market has been largely driven by macro events and, as noted in chart below, has been trading with a surprisingly close correlation to the moves in the European equity markets. While origin have been noted as hedge sellers over the past couple of days, commercial paper has been rather light as traditional coffee fundamentals take a back seat to macro and chart related forces.
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