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 idea that that exchange stocks will continue to tighten both at the ICE and the LIFFE continues to underpin this recovery rally, but the reality of huge upcoming crops from South and Central America may be putting a blanket over the coffee market. September coffee was able to hold much of last week’s recovery rally but was unable to extend prices outside of the recent trading range on Monday. Exports from Vietnam during July were up nearly 70% from last year’s levels, but that may be due to LIFFE futures reaching price levels high enough to encourage producer selling. Weather forecasts for Brazilian production areas continue to predict temperatures well above levels that could produce a damaging frost. ICE certified Arabica coffee stocks on July 26th fell by 820 bags to 2,130,903 bags, with 300 bags pending review. Recent revisions to 2009/10 global coffee production forecasts are reflected by tight near-term supply levels, which have helped to lift prices well off of their recent lows. The inability of September coffee to move past this month’s highs, however, may be due to a realization that supplies will be much more plentiful later on in the year. Weather remains favorable for an active harvest in Brazil and there is still no sign of threatening cold weather.
TODAY’S GUIDANCE: Unless there is a dramatic change in the supply/demand outlook, September coffee will likely have difficulty getting past the 170.00 level. Another test of last week’s lows may be on the cards if the upside momentum runs out of steam. Support for September coffee comes in at 163.70 with 167.70 and 169.80 as next resistance levels.
Coffee Market Commentary – 2010.07.27
by Terry Roggensack on July 27, 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!
The idea that that exchange stocks will continue to tighten both at the ICE and the LIFFE continues to underpin this recovery rally, but the reality of huge upcoming crops from South and Central America may be putting a blanket over the coffee market. September coffee was able to hold much of last week’s recovery rally but was unable to extend prices outside of the recent trading range on Monday. Exports from Vietnam during July were up nearly 70% from last year’s levels, but that may be due to LIFFE futures reaching price levels high enough to encourage producer selling. Weather forecasts for Brazilian production areas continue to predict temperatures well above levels that could produce a damaging frost. ICE certified Arabica coffee stocks on July 26th fell by 820 bags to 2,130,903 bags, with 300 bags pending review. Recent revisions to 2009/10 global coffee production forecasts are reflected by tight near-term supply levels, which have helped to lift prices well off of their recent lows. The inability of September coffee to move past this month’s highs, however, may be due to a realization that supplies will be much more plentiful later on in the year. Weather remains favorable for an active harvest in Brazil and there is still no sign of threatening cold weather.
TODAY’S GUIDANCE: Unless there is a dramatic change in the supply/demand outlook, September coffee will likely have difficulty getting past the 170.00 level. Another test of last week’s lows may be on the cards if the upside momentum runs out of steam. Support for September coffee comes in at 163.70 with 167.70 and 169.80 as next resistance levels.
Tags: Coffee, Softs
About Terry Roggensack