Supply Data Should Guide Coffee Futures

October 1, 2019 08:30 AM
December coffee has entered some consolidation
Hedge Funds are holding their short positions
Coffee Futures


Supply Data Should Guide Coffee Futures


December coffee futures have entered some consolidation. After the lows made in August and September, the futures contract tried to trade above 104.00 but that couldn’t hold.

After the COT was released, traders can see hedge funds and CTAs are holding their Coffee futures short positions.

Adding to the potential of a move lower again is brazil’s record crop for this year. With the recent rainfall over the past week and dry conditions headed Brazil’s way, we may get a little guidance with further-out months in the short-term. If these dry conditions continue to look to see if the production numbers are affected for 2020.

For the front month, 103.50 has been resistance, a break above this is needed technically. If the market holds in this range, negative supply news could have the December contract test 98.00 again. Trader’s looking for exposure to the long side should look to buy calls on dips.

About the Author

Peter Mooses is a commodity broker at RJO Futures. He enjoys the analytical aspects of futures trading and appreciates the economic impact that commodities have across all markets. Peter utilizes market analysis and trends to help clients achieve a balance between risk and return, while always keeping their investment objectives top of mind. Follow Peter on Twitter @PMoosesRJO