Coffee Futures
Coffee futures in the May contract traded higher by about 200 points closing around 121.00 breaking a 4-day losing streak after hitting another yearly low earlier in the trading session as this has been the weakest agricultural commodity out of them all in 2018. At the present time I’m not involved, however prices are extremely cheap in my opinion as I’m surprised at how low prices have gone as we have the possibility of retesting the June 19th low of 113 which is right at a 2 year low as I do think the downside is limited so I will not take a short position.
Coffee prices clearly are trading below their 20 and 100 day moving average as the trend is still to the downside as I will be patient and keep a close eye on this market for a possible bullish position as I think all of the bad fundamental news has already been reflected into the price as a huge crop coming out of the largest producer in the world which is Brazil continues to pressure this market.
The chart structure in coffee is still very solid at the present time due to the fact of the low volatility as we continually grind lower on a daily basis which is the classic bearish trend as I think we are squeezing blood out of a turnip & if you’re a longer-term investor these prices look very appetizing in my opinion just make sure that you manage the risk.
TREND: –HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY—MEDIUM
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