March Coffee Showing Strength

February 2, 2017 9:43AM CST

Back on January 10th of 2017, we witnessed March coffee break above the 14535 resistance area. Subsequent strength followed, reaching highs not seen since November. Since reaching close to the 15700 level, it appears March coffee is now going into a healthy-sized correction, with long liquidation. Throughout this last selloff, we’ve seen March coffee break below the corrective low of 14675, from January 18th of this year. This violation could possibly suggest more corrective price action to follow.

Heavy rains are forecasted in key Arabica growing areas of Brazil, adding continued pressure to the March coffee futures contract, keeping bullish traders in profit-taking mode. This wet weather should help to offset and balance the current low supply of Robusta coffee in Brazil, and ultimately make for a stronger long term supply outlook.

 

Mar '17 Coffee Daily 

Source: RJO Futures Pro

Coffee Daily Chart

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