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While the coffee market has been trading in relatively large ranges over the past few session, prices have kept gravitating back towards the 164.00 level in September coffee. The recent delivery issues with the London contract have kept prices at elevated levels, but there has been little in the way of direction during the past two weeks or so. The market started yesterday’s session under heavy pressure but was able to recover a large portion of those losses by the end of trading. Recent dry weather conditions in Colombia and Vietnam are likely to have a negative impact on this season’s production. However, temperatures still have not come close to reaching freezing levels in Brazilian growing areas. Tight deliverable stocks for both the NY and London contracts underpinned coffee prices over the past month. However, expectations for large increases in Brazilian and Colombian production this season hang over the market. The upcoming supply surge may prove to be the key factor in September coffee heading lower, as production from Colombia and Central America should ease the deliverable stocks situation once supplies start flowing northwards. There may be further upside left for September coffee, but the recent trading range has been posting higher lows and lower highs. With the shadow of huge production from South America hitting the markets soon, another move back towards the high may prove to be as high as September coffee will trade for awhile.
TODAY’S GUIDANCE: Key support for September coffee comes in at 156.85 with 164.40 and 167.20 as resistance. While yesterday’s initial sell-off was unable to follow through to the downside, there are still too many negatives on the fundamental side to feel that the chances for another run at last month’s highs are any more than remote at best.
Coffee Market Commentary – 2010.07.13
by Research on July 13, 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!
While the coffee market has been trading in relatively large ranges over the past few session, prices have kept gravitating back towards the 164.00 level in September coffee. The recent delivery issues with the London contract have kept prices at elevated levels, but there has been little in the way of direction during the past two weeks or so. The market started yesterday’s session under heavy pressure but was able to recover a large portion of those losses by the end of trading. Recent dry weather conditions in Colombia and Vietnam are likely to have a negative impact on this season’s production. However, temperatures still have not come close to reaching freezing levels in Brazilian growing areas. Tight deliverable stocks for both the NY and London contracts underpinned coffee prices over the past month. However, expectations for large increases in Brazilian and Colombian production this season hang over the market. The upcoming supply surge may prove to be the key factor in September coffee heading lower, as production from Colombia and Central America should ease the deliverable stocks situation once supplies start flowing northwards. There may be further upside left for September coffee, but the recent trading range has been posting higher lows and lower highs. With the shadow of huge production from South America hitting the markets soon, another move back towards the high may prove to be as high as September coffee will trade for awhile.
TODAY’S GUIDANCE: Key support for September coffee comes in at 156.85 with 164.40 and 167.20 as resistance. While yesterday’s initial sell-off was unable to follow through to the downside, there are still too many negatives on the fundamental side to feel that the chances for another run at last month’s highs are any more than remote at best.
Tags: Coffee, Softs
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