January 25th, 2019 Newsletter

Commitment of Traders Report can be used for trading decisions and coffee outlook

January 25th, 2019 - Issue #951

In This Issue

1. Trading 202: Commitment of Traders Report - What Lies beneath
2. Hot Market Report: Is Coffee Ready to Make a Move Higher?
3. Economic Calendar

MLK Hoiliday this Monday. Markets will have modified trading hours and some are closed on Monday.

1. Trading 202: Commitment of Traders Report - What Lies beneath

In this 24 page PDF booklet, Gary Kamen of Trends in Futures reviews the commitment of traders report, what it means, how traders can utilize it and much more.

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* History of the COT report
* Why is this report important?
* The new COT report
* How can you use the information in this report?
* And much more....

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2. Hot Market Report: Is Coffee Ready to Wake Up?

By John Thorpe, Senior Broker

Click on image below to enlarge

Coffee futures; Coffee futures are part of the SOFTS family which includes Cocoa, Sugar, Cotton, Coffee and Orange Juice. All traded on the ICE exchange.

Daily chart from this morning, (Jan. 25th 2019). In coffee I am seeing some conflicts between the technical outlook and the fundamental outlook. From the chart perspective I see a possibility for the giant to wake up... On the other hand as you read the fundamental analysis below, you will see that the overall picture is a bit bearish. Who will win? the technicians or the fundamentalists?.....time will telll.......

Abundant Supplies of Arabica Coffee in Warehouses and a near record crop Current supplies remain abundant after ICE-monitored coffee inventories on Wednesday rose to a 4-1/2 year high of 2.489 mln bags.

Source: The ICE Exchange

The downside in coffee prices may not be limited after Conab, Brazil's official government equivalent of our own U.S.D.A. Projected in their outlook last Thursday, a record coffee crop in Brazil and should be a bearish factor for coffee prices after Conab recently raised its Brazil 2018/19 coffee production estimate to a record 61.7 mln bags (+37% y/y) from a Sep forecast of 59.9 mln bags. Current weather, Dryness in the prime growing regions near and on the east coast of Brazil have been somewhat supportive of prices recently. Well capitalized accounts should look at Options as well as futures to trade this market.

This chart was prepared using CQG Q Trader software, which you can demo for 14 days with realtime data.
To access a free trial to the ALGOS shown in the chart ( DIAMONDS included) along with other tools, visit and sign up for a free trial for 21 days with real-time data.

ICE Arabica Coffee Specs
Hours: 03:15 AM to 12:30 PM Central Time
Margins: $2640.00 initial, $2400 Maint. ( as of the date of this newsletter)
Point Value: full point = $375.00 ( Example: 100.00 to 99.00). Min fluctuation is 0.05 = $18.75 ( Example: 100.00 to 99.95) Settlement: Physical Delivery
Months: (Sep, Dec, Mar, May, July)
Weekly Options:YES

Some of the basic fundamentals to keep in mind when you are considering trading coffee futures:
1. Supply and Demand.
2. Brazil, Vietnam, Columbia and Indonesia are the primary producers
3. Freezes
4. Technological advances
5. the makeup of open interest thru the COT reports
6. Inflationary prospects
7. Geopolitical Stability

Our brokers here at Cannon will be happy to chat about the Coffee market, other exotic products, other futures, options, futures spreads and much more! Feel free to contact us at any time.

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
01/25
Fri
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Durable Goods-Ex Transportation(Dec)
7:30 AM CST - Durable Orders(Dec)
9:00 AM CST - New Home Sales(Dec)
2:00 PM CST - Cattle On Feed
LT: Jan Bitcoin(CME)
Feb 2,5,10 Year Notes Options(CBT)
Feb Bonds Options(CBT)
Feb Canola Options(CBT)
Feb Wheat Options(CBT)
Feb Corn Options(CBT)
Feb Oats Options(CBT)
Feb Rough Rice Options(CBT)
Feb Soybeans,Soymeal,Soyil(CBT)
01/28
Mon

 
 
 
LT: Feb Copper Options(CMX)
Feb Gold & Siver Options(CMX)
Feb Natural Gas Options(NYM)
Feb RBOB & ULSD Options(NYM)
01/29
Tue
7:00 AM CST - S&P Case-Shiller Home Price Index(Nov)
7:30 AM CST - Adv International Trade In Goods(Dec)
7:30 AM CST - Adv Retail Inventories(Dec)
7:30 AM CST - Adv Wholesale Inventories(Dec)
9:00 AM CST - Consumer Confidence(Jan)
3:30 PM CST - API Energy Stocks
LT: Jan Butter(CME)
Jan Milk(CME)
Jan Copper(CMX)
Jan Gold & Silver(CMX)
Jan Platinum & Palladium(NYM)
Feb Natural Gas(NYM)
Jan Butter Options(CME)
Jan Milk Options(CME)
01/30
Wed
6:00 AM CST - MBA Mortgage Index
7:15 AM CST - ADP Employment Change(Jan)
7:30 AM CST - Pending Home Sales(Dec)
9:30 AM CST - EIA Petroleum Status Report
1:00 PM CST - FOMC Rate Decision(Jan)
2:00 PM CST - Dairy Products Sales
FN: Feb Natural Gas(NYM)
 
 
 
01/31
Thu
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Employment Cost Index(Q4)
7:30 AM CST - Personal Income & Spending(Dec)
8:45 AM CST - Chicago PMI(Jan)
9:30 AM CST - EIA Natural Gas Report
2:00 PM CST - Cattle
3:30 PM CST - Money Supply
FN: Feb Copper(CMX)
Feb Gold & Silver(CMX)
Feb Platinum & Palladium(NYM)
LT: Jan Feeder Cattle(CME)
Jan Fed Funds(CME)
Feb RBOB & ULSD(NYM)
Jan Feeder Cattle Options(CME)
Jan Fed Funds Options(CME)
Feb Lumber Options(CME)
02/01
Fri
7:30 AM CST - Ave Workweek & Hourly Earnings(Jan)
7:30 AM CST - Nonfarm Payrolls(Jan)
7:30 AM CST - Unemployment Rate(Jan)
9:00 AM CST - Construction Spending(Dec)
9:00 AM CST - ISM Manufacturing Index(Jan)
9:00 AM CST - Univ of Michigan Consumer Sentiment-Final(Jan)
2:00 PM CST - Cotton System
2:00 PM CST - Fats & Oils
2:00 PM CST - Grain Crushings
LT: Feb Live Cattle Options(CME)
Mar Cocoa Options(ICE)

 
02/04
Mon
9:00 AM CST - Factory Orders(Dec)
 
 
 
FN: Feb Live Cattle(CME)
Feb RBOB & ULSD(NYM)

 
02/05
Tue
7:30 AM CST - Trade Balance(Dec)
9:00 AM CST - ISM Non-Manufacturing Index(Jan)
3:30 PM CST - API Energy Stocks
 

 
 
 
02/06
Wed
6:00 AM CST - MBA Mortgage Index
7:30 AM CST - Productivity-Prel(Q4)
9:30 AM CST - EIA Petroleum Status Report
2:00 PM CST - Dairy Products Sales

 
 
 
02/07
Thu
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
9:30 AM CST - EIA Natural Gas Report
2:00 PM CST - Consumer Credit
3:30 PM CST - Money Supply

 
 
 
FN=First Notice, OE=Option Expiration, LT=Last Trade

Disclaimer: This calendar is compiled from sources believed to be reliable. Moore Research Center, Inc. assumes no responsibility for any errors or omissions. It is meant as an alert to events that may affect trading strategies and is not necessarily complete. The release dates for certain economic reports may have been rescheduled.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!

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