A couple key factors have played a major role in the recent breakout of March Coffee futures. At the center of the radar is the flurry of two hurricanes, Eta earlier this month, did substantial damage to key growing areas of Central America and Mexico, producing flash flooding and mudslides. Shortly after, hurricane Iota was on the way, but has since been downgraded from hurricane to tropical storm. Regardless, the extremely wet weather will result in delays in harvesting and increase crop damage on-the-whole, prompting solid support to March coffee prices.

In addition to the bullish fundamentals of weather, Pfizer and Moderna’s recent announcement of 94-95% effective vaccines for Covid 19 has sparked a bit more confidence that life as we “knew it” will return in time. Although several factors will continue to play a role in how effective the vaccine and distribution of the vaccine will be, on-the-whole, the news is positive for the future of coffee shops and restaurants.

From a technical perspective, the aggressive bullish crossover of the price action through the 200-day MA has been followed by even more volatile buying. Both RSI and Momentum levels have increased with no bearish diversion from the price action.  There are several strategies that traders can apply in this situation.  

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Adam Tuiaana

Adam grew up in Chicago and was always fascinated by the fast-paced action found in the futures market hub there. He began participating in the financial markets by trading stocks in 1997 and began his career as a trading consultant with RJO Futures in March of 2009. At RJO, he specializes in risk management and disciplined trading plans, and is focused on educating clients with one-on-one consulting and training. Adam believes the best approach to trading is to take a measured and objective approach and let the markets guide your decisions.