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A firm dollar and weakness in outside markets looks to help pressure the market to start the day but coffee seems to be a market with firm short-term cash fundamentals and a market in which we will see some increased interest from commercial traders on corrections. The Brazil harvest does not get going too significantly until June and cash premiums are still relatively high for Colombia and neighboring Central American countries. May coffee was able to capitalize on a weaker Dollar and moved towards its highest price since late January yesterday posting solid gains on the session. With much of Europe still on holiday, there was little resistance put on prices as they probed to the upside. London was closed on Monday and started with a firm tone today. Also lending support to prices was the strength in other commodity markets as well as new highs in the US stock market. A general theme of improving global demand due to an improving global economy has helped support coffee and several other commodity markets recently. Costa Rica exports for the October 1st to March 22nd time frame have reached 1.185 million bags which is down 3.8% from last year. El Salvador production for the October 1st to February 21st time frame has reached just 1.028 million bags which is down 28% from last year. The COT reports on Friday (as of March 30th) showed a fairly aggressive buying trend from non-commercial traders (funds) who increased their net long position by 8,818 contracts for the week to 21,850. The buying is seen as a short-term positive force and the market is not close to an overbought condition. Daily ICE certified deliverable coffee stocks fell by 10,422 bags to 2.589 million with 59,858 bags pending review.
TODAY’S GUIDANCE: The market seems to have completed the base-building process and looks poised to continue to grind higher but is a bit overbought. A large Brazil harvest ahead is likely already “priced” so any surprises will likely favor the bull camp.
TODAY’S MARKET IDEAS: Short-term support levels for July coffee include 139.50 and 138.90 with 142.30 and 143.40 as next upside targets. Look for choppy but higher trade just ahead.
Coffee Market Commentary – 2010.04.06
by Terry Roggensack on April 6, 2010
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!
A firm dollar and weakness in outside markets looks to help pressure the market to start the day but coffee seems to be a market with firm short-term cash fundamentals and a market in which we will see some increased interest from commercial traders on corrections. The Brazil harvest does not get going too significantly until June and cash premiums are still relatively high for Colombia and neighboring Central American countries. May coffee was able to capitalize on a weaker Dollar and moved towards its highest price since late January yesterday posting solid gains on the session. With much of Europe still on holiday, there was little resistance put on prices as they probed to the upside. London was closed on Monday and started with a firm tone today. Also lending support to prices was the strength in other commodity markets as well as new highs in the US stock market. A general theme of improving global demand due to an improving global economy has helped support coffee and several other commodity markets recently. Costa Rica exports for the October 1st to March 22nd time frame have reached 1.185 million bags which is down 3.8% from last year. El Salvador production for the October 1st to February 21st time frame has reached just 1.028 million bags which is down 28% from last year. The COT reports on Friday (as of March 30th) showed a fairly aggressive buying trend from non-commercial traders (funds) who increased their net long position by 8,818 contracts for the week to 21,850. The buying is seen as a short-term positive force and the market is not close to an overbought condition. Daily ICE certified deliverable coffee stocks fell by 10,422 bags to 2.589 million with 59,858 bags pending review.
TODAY’S GUIDANCE: The market seems to have completed the base-building process and looks poised to continue to grind higher but is a bit overbought. A large Brazil harvest ahead is likely already “priced” so any surprises will likely favor the bull camp.
TODAY’S MARKET IDEAS: Short-term support levels for July coffee include 139.50 and 138.90 with 142.30 and 143.40 as next upside targets. Look for choppy but higher trade just ahead.
Tags: Coffee, Softs
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