March Coffee Bearish Outlook

December 20, 2017 12:17PM CST

March coffee is seeing a bit of support this morning from what may be a short covering rally. Coffee prices continue to be pinned down by a reported huge Vietnamese crop. The Hightower Group has reported that analyst feel the Vietnamese crop “will be close to a record”. Coffee prices will need some solid demand strength and supply news that falls short of said expectations. Some feel that coffee prices are oversold, and due for some kind of pullback to the 125-135 range, which coffee prices had been in throughout most of October and November. However, we cannot overlook that fact coffee prices not only violated the 125 range low, but also managed to violate the 119 critical support low from June. Yes, coffee prices have been able to hold some support, but traders should assume that follow through selling is on the horizon. Consider buying put options with strikes below the aforementioned critical low of 119. On this rally, you should be able to get them fairly cheap.

Coffee Mar '18 Daily Chart

Coffee_Mar18_Daily_Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.