July ’20 coffee futures start the day with a positive reversal on threat of tightening near term supplies and concerns of harvest issues. Reports continuously indicate shrinking coffee stocks and the threat of coronavirus impacting labor during harvest. This creates an interesting situation for the coffee market. There could be strong volatility with headlines shifting between near term bullish and long term bearish fundamentals. However, with bullish near term tight supplies and potential for abundance down the road, there could be a major discrepancy created between front month and differed futures contracts which could be an exciting opportunity for spread traders.

Coffee Jul ’20 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.