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!
Cold weather in Brazil this week came early in the cold season ahead of a weekend, and this was enough to spark a significant short-covering surge in coffee yesterday. Buying continued overnight to drive September coffee to the highest level since January. With the large base of support under the market and rising open interest, the technical action is very strong and this could attract additional buying. Normally, commercial sellers would be much more active but the Brazil coffee harvest is just picking up steam and Colombia production is just starting to improve so spot supply is still tight. Indonesia cash markets are also strong and there are some concerns that commercial traders may have oversold the crop and this has added to the support. July coffee made a strong move to the upside yesterday, moving well beyond its recent trading range and almost reaching last week’s highs. Updated weather forecasts from Brazil are calling for cooler weather in several production areas over the weekend, although those projected temperatures are not quite low enough to cause frost damage. While the damage done by Tropical Storm Agatha to coffee growing areas in Guatemala and El Salvador has not been fully quantified by government officials, predictions for a heavy tropical storm season this year may mean that this uncertainty may be repeated over the next few months. The International Coffee Organization believes the 2009/10 production will be 120.6 million bags which is down 5.9% from last year and down from their estimate in April of 122 million. Demand for 2009 is pegged at 132 million and 2010 at 134 million. However, production for the 2010/11 season is pegged at 133-135 million. ICE certified coffee stocks for the day were down 18,537 bags to 2.268 million with 4,920 bags pending review.
TODAY’S GUIDANCE: Earlier than normal cold weather, earlier than normal damage from tropical storms and tight spot supply is helping to support and the turn to more bullish technical action adds to the positive tone. Close-in support for September coffee is at 139.90 and the 50% mark of the December to May break is at 142.45. The next key resistance is at 145.05.
TODAY’S MARKET IDEAS: Fundamental news could turn sour into July but the technical action remains a bullish force for now.
Coffee Market Commentary – 2010.06.11
by Terry Roggensack on June 11, 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!
Cold weather in Brazil this week came early in the cold season ahead of a weekend, and this was enough to spark a significant short-covering surge in coffee yesterday. Buying continued overnight to drive September coffee to the highest level since January. With the large base of support under the market and rising open interest, the technical action is very strong and this could attract additional buying. Normally, commercial sellers would be much more active but the Brazil coffee harvest is just picking up steam and Colombia production is just starting to improve so spot supply is still tight. Indonesia cash markets are also strong and there are some concerns that commercial traders may have oversold the crop and this has added to the support. July coffee made a strong move to the upside yesterday, moving well beyond its recent trading range and almost reaching last week’s highs. Updated weather forecasts from Brazil are calling for cooler weather in several production areas over the weekend, although those projected temperatures are not quite low enough to cause frost damage. While the damage done by Tropical Storm Agatha to coffee growing areas in Guatemala and El Salvador has not been fully quantified by government officials, predictions for a heavy tropical storm season this year may mean that this uncertainty may be repeated over the next few months. The International Coffee Organization believes the 2009/10 production will be 120.6 million bags which is down 5.9% from last year and down from their estimate in April of 122 million. Demand for 2009 is pegged at 132 million and 2010 at 134 million. However, production for the 2010/11 season is pegged at 133-135 million. ICE certified coffee stocks for the day were down 18,537 bags to 2.268 million with 4,920 bags pending review.
TODAY’S GUIDANCE: Earlier than normal cold weather, earlier than normal damage from tropical storms and tight spot supply is helping to support and the turn to more bullish technical action adds to the positive tone. Close-in support for September coffee is at 139.90 and the 50% mark of the December to May break is at 142.45. The next key resistance is at 145.05.
TODAY’S MARKET IDEAS: Fundamental news could turn sour into July but the technical action remains a bullish force for now.
Tags: Coffee, Softs
About Terry Roggensack