Out @ -11. When it is too obvious and everybody is talking about the trade, then it is probably not worth it...
Sorry for not keeping track of my trades lately, but I have moved at the end of the year and was too busy...
Just went long the London / NY cocoa spread again @ -162 $/T. - Drought threatening mid-crop in west Africa. - Near record historical lows. - London curve backwardating whereas NY standing still.
Hi @TraDaToR Do different regions of crop growing tend to trade on different exchanges? So is a West African crop failure more likely to lead to higher London prices than NY prices? Or is it just a case of shipping differential and you think the spread will normalize/ mean revert?
A bit of everything you listed indeed. London cocoa is mainly West Africa whereas NY is mostly SE Asia. There can be some physical arbitrage, because most of the low quality cameroon beans that were depreciating London last year are gone( not sure about this one ). And it should mean revert as well statistically.
Kw/w N contract so low good mean reversion trade or catching a falling knife? China talks should not affect this more than fundamentals