September ’19 coffee futures gap up in price to 113.95 this morning after last week’s 8.7% gains! These gains are due to positive demand and easing global trade tensions support with a potentially large global deficit in production due to weather related issues. This weekend saw the U.S. and China agree to resume trade talks which has removed a significant amount of pressure from many markets and brought back a sense of confidence in investors. Managed money funds are still net short 30,855 contracts per the June 25th Commitments of Traders Report so there is still plenty of potential for short covering and buying momentum. Weekly chart suggests the long-term trend is looking to turn in favor of the bulls. There is risk of a near term pull back so it may be advantageous to lock in profits on any long positions, or it could be a bullish opportunity to get in at a cheaper price.
Coffee Sep ’19 Daily Chart