Coffee Futures–-Coffee futures in the December contract is trading slightly higher for the 5th consecutive session up 55 points at 101.50 a pound still looking for some fresh fundamental news as traders are keeping a close eye on weather conditions in the country of Brazil.
Fundamentally speaking coffee prices have underlying support from last Tuesday’s news that Brazil’s government forecasting agency, Conab, cut its Brazil 2019 coffee production estimate to 49 mln bags from a previous estimate of 50.9 mln bags as adverse weather cut coffee yields. I have been recommending a bullish position from the 101 level and if you took that trade continue to place the stop loss under the 14 year low standing at 93.40 as an exit strategy.
Coffee prices are now trading above their 20-day and right at their 100 day as it looks to me that higher prices are ahead, however for the bullish momentum to continue prices will have to break the September 16th high oft 104.95 as that could possibly happen in this weeks trade so continue to place the proper stop loss as I think the volatility will increase substantially especially if the hot & dry weather conditions persist in Brazil.
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