Coffee Futures––Coffee futures in the September contract is currently trading at 109.65 as prices are right near a 5 month high after settling last Friday in New York at 100.65 up over 900 points for the trading week as this trend has turned higher.
I have talked about coffee in many previous blogs, however at the current time I’m not involved as the chart structure is terrible as the 10-day low stands at 96.25 as the risk is over $5,000 per contract which is too high in my opinion.
I will keep a close eye on this market and wait for some type of price retracement while then entering into a bullish position while lowering the monetary risk as well as concerns about cold and wet weather entering Brazil next week possibly delaying harvest is pushing prices higher. Fundamentally speaking current coffee supplies have tightened after ICE-monitored coffee inventories dropped to an 8-3/4 month low of 2.377 mln bags Friday down from March’s 4-3/4 year high of 2.503 mln bags.
Coffee prices are trading above their 20 and 100 day moving average as the trend certainly has turned higher as my only soft commodity recommendation is a bullish sugar trade at the current time, but I’m keeping a close eye on this as we could be involved in next week’s trade.
CHART STRUCTURE: POOR
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