Coffee Futures—Coffee futures in the July contract settled last Friday in New York at 92.90 while currently trading at 93.90 up about a 100 points as prices are now right near a 2 week high. Coffee prices are trading right at their 20 day but still below their 100 day moving average which stands at 103 as I think there’s a possibility that a spike bottom was created on April 17th at 89.00 as I will be looking at a possible bullish position in next week’s trade.
Large money managed funds are short around 81,000 contracts as there are also heavily short the grain market as they believe lower prices are still ahead, however if we had some spark of bullish news there could be massive short covering which would send prices higher.
The volatility in coffee remains exceptionally low as the soft commodities across the board remain bearish as the U.S dollar continues to strengthen against the Brazilian Real which is having a negative impact on prices.
Coffee has an oversupply issue as the International Coffee Organization has raised carryover levels from 2.29 million bags to 3.1 million, but I do believe all of this negative fundamental news has already been reflected into the price as that’s why prices are near a 14 year low.
TREND: MIXED—LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
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