Coffee Futures Consolidating Before Their Next MovePosted 06/05/2019 9:43AM CT |
The rise of July ’19 coffee futures pause with this morning’s charts showing today could be another inside day. Brazil’s coffee exports last month jumped up 17% vs April and 123% vs May 2018 which is significant indicator of strong demand. Supply has some issues with it being an off year for production, the USDA forecast for a 15% decline in Nicaraguan production from last year, ICE exchange coffee stocks close to their lowest level since October 2018, and a global coffee deficit is anticipated. The daily chart demonstrates overall the momentum for this market is still strongly bullish, a pull-back is possible though, considering the sharp rise in prices over just a few trading sessions. However, this could be considered a bullish opportunity as the fundamentals support prices, which are still considerably cheap being at or below the cost of production estimates per pound.
Coffee Jul ’19 Daily Chart