Coffee Futures–-Coffee futures in the May contract is trading higher by 105 points at 94.00 a pound as prices still look to be forming a bottoming out pattern in my opinion. Coffee inventories remain at 2.493 million bags as we are still right near a 4 3/4 year high as inventory levels have been the main culprit for these depressed prices as we are still hovering right near a 14 year low.
The chart structure is outstanding at the current time as prices really have gone nowhere for weeks as it still looks to me that a possible bottom was created on April 2nd at 91.25 as the breakout to the upside stands at the 4 week high which is at 98.70 which could be touched on any given day due to the low volatility.
Coffee prices are now trading right at their 20 day but still below their 100 day moving average which stands at the 104 level as I can’t imagine this volatility is going to remain at these historically low levels for much longer.
Ideal weather conditions in the countries of Vietnam and Brazil which are the 2 largest coffee producers in the world also continues to put pressure on prices, however I do believe all of this poor fundamental news has already been reflected into the price as I still think the downside is very limited.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY : LOW
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