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The market is oversold technically and has seen a set-back to fairly strong support level near the 135.00-137.00 level for March coffee. Open interest has come down from the December peak but is still relatively high. Some of the tightness issues have not gone away and cash markets remain tight in Colombia and should begin to tighten up in Brazil as well with more movement by the government to absorb excess supply and move it to government storage. For now, however, the increase flow of robusta coffee on the world market and new contract lows for March London coffee on December 29th have helped spark the long liquidation sell-off. Vietnam has exported 4.44 million bags of coffee for the first three months of the 2009/2010 season (October start) which is up 8.2% from last year. For the calendar year of 2009, Vietnam exports reached 19.5 million bags which is up 10.2% from last year. December exports were down 4.6% from last year and traders see a smaller crop this season as a reason to suspect smaller exports for all of the 2009/2010 season. March coffee closed slightly higher on the session yesterday after moving to the lowest level since November 27th which may be seen as a slightly positive technical development. Talk of the oversold condition of the market and ideas that the fundamental outlook for the coming year is somewhat constructive helped to support. A stronger US dollar may have helped limit the upside and pressure the market early in the day. A weak dollar overnight helped to support. Daily ICE certified deliverable coffee stocks were down 11,269 bags to 3.099 million with 25,961 bags pending review.
TODAY’S GUIDANCE: The turn in the dollar and the recent drop in exchange stocks may be factors which help coffee forge a near-term low. Support for March coffee is at 136.15 and then 134.40 with resistance at 139.10 and 141.15.
Coffee Market Commentary – 2009.12.31
by Terry Roggensack on December 31, 2009
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The market is oversold technically and has seen a set-back to fairly strong support level near the 135.00-137.00 level for March coffee. Open interest has come down from the December peak but is still relatively high. Some of the tightness issues have not gone away and cash markets remain tight in Colombia and should begin to tighten up in Brazil as well with more movement by the government to absorb excess supply and move it to government storage. For now, however, the increase flow of robusta coffee on the world market and new contract lows for March London coffee on December 29th have helped spark the long liquidation sell-off. Vietnam has exported 4.44 million bags of coffee for the first three months of the 2009/2010 season (October start) which is up 8.2% from last year. For the calendar year of 2009, Vietnam exports reached 19.5 million bags which is up 10.2% from last year. December exports were down 4.6% from last year and traders see a smaller crop this season as a reason to suspect smaller exports for all of the 2009/2010 season. March coffee closed slightly higher on the session yesterday after moving to the lowest level since November 27th which may be seen as a slightly positive technical development. Talk of the oversold condition of the market and ideas that the fundamental outlook for the coming year is somewhat constructive helped to support. A stronger US dollar may have helped limit the upside and pressure the market early in the day. A weak dollar overnight helped to support. Daily ICE certified deliverable coffee stocks were down 11,269 bags to 3.099 million with 25,961 bags pending review.
TODAY’S GUIDANCE: The turn in the dollar and the recent drop in exchange stocks may be factors which help coffee forge a near-term low. Support for March coffee is at 136.15 and then 134.40 with resistance at 139.10 and 141.15.
Tags: Coffee, Softs
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