From Agrimoney:
Hedge funds, having been caught out by the jump in coffee futures, risk being wrong-footed by a correction, Macquarie warned, raising the potential for a "violent swing downwards" in prices, which soared to a fresh 16-month high.Managed money, a proxy for speculators, raised by more than 100,000 contracts its net long in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator.The rise took the net long – the extent to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall - above 600,000 contracts for the first time in 16 months.Hedge funds have now more than reversed in three weeks the bearish swing taken between October and January, the longest unbroken trend of increasingly short positioning on record.And the switch has been driven in part by a reversal in sentiment towards New York-traded arabica coffee, in which speculators have, in the face of dry weather in top producer Brazil, turned this month from a net short position to their biggest net long position in nearly three years.'Yields and quality constrained'...MORE
Arabica coffee futures for May soared 5.8% on Monday to 179.25 cents a pound at one point, a 16-month high, and taking their rise in 2014 to 59%, reflecting what many observers have termed an "unprecedented" drought in Brazil's main central coffee belt....MORE
