Coffee Jumps as Traders Cover Short Bets
Coffee prices jumped higher Monday as traders bought futures to cover short positions in anticipation that the market is due to move higher.
Arabica coffee prices for December rose 2.5% to $1.1945 a pound on the ICE Futures U.S. exchange. Investors, hedge funds and other money managers betting on lower prices outweighed bullish investors by 22,410 contracts as of Tuesday, according to a weekly report from the U.S. Commodity Futures Trading Commission published after Friday’s close. It is the highest short position for the market since July 28, which traders took as a sign that the market could be due for a move higher.
“I don’t think we’re at the beginning of a bull market in coffee but the bear is probably getting tired,” said Nicholas Gentile, manager partner at Nic Jen Capital Management & Consulting in New York.
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