Yesterday, #Arabica #certifiedstocks dropped an impressive 70k and the #calendarspreads are going bananas. Calendar spreads in Arabica #coffeemarket are notoriously boring (unlike #Robusta), and yet this year spreads have been ANYTHING BUT BORING. #Spec interest in the spreads has driven a lot of the #bullish #price action there but this has been instigated by some very real #fundamental concerns.
The short answer to why spreads are rallying is that calendar spreads are known for being a fundamental #trade, and the fundamentals are strong. However, there is a lot more to the story here. Let’s begin by examining what the calendar spreads are, and that should help to explain why they reflect fundamentals.