Softs

Coffee Futures Consolidating Before Their Next Move

Posted 06/05/2019 9:43AM CTEric Scoles

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

Coffee Jul '19 Daily Chart

Eric Scoles

Eric entered the workforce during the summer of 2007 as an apprentice tradesman just before the big crash and recession which followed. The impact of which strongly inspired his interest in the financial industry and began him as a student of the markets. Eric worked throughout the following years developing strong communication skills and risk management practices in the aviation and marketing industries before ultimately getting licensed and turning his passion into a career as a market strategist with RJO Futures.