With U.S. stocks still trading at historic highs, a risk-on mentality has taken hold of the already bullish December coffee futures market. We continue to see that fundamentals such as a strong Brazilian currency over the past month, coupled with an ongoing poor weather outlook from key growing areas of Brazil have sparked some solid buying support to December coffee prices. Our friends at The Hightower Group have commented that “Vietnam’s Department of Customers said that their nation’s October coffee exports came in at 87,497 tonnes (1.485 million bags) which was down 5.3% from September and below government estimate of 100,000 tonnes (1.67 million bags).”

On the technical side, an impressive rally with a subsequent expected pullback shows all the signs of higher prices for December coffee in the long term.  A break above the critical 103 resistance level was impressive, and as a result, sparked aggressive buying over the last week. We are likely to continue in an uptrend after this pullback. It may be a great time for bulls to jump in again once the pullback reaches 103 support again.

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.