Coffee Still Oversold, but Brazil Rains Could Have Funds SellingPosted 03/01/2019 9:27AM CT |
The coffee market failed to gain any benefit from the end of month short-covering rally and finished February down 9.7%. It will take fresh bullish supply news for coffee to find any legs, otherwise it may have trouble clearing its recent lows. Coffee was pressured yesterday by weakness in the Brazilian currency and that should encourage producers to market their remaining old crop supply to foreign customers. There is rain in the forecast for Brazil’s southern growing region through the end of next week. While the rainfall wont completely fix the negative impact of flowering issues last year and dry conditions in December, it should provide some benefit to the upcoming 2019/20 crop. With there being at least a few months until we have a better gauge on the crop, weather should be the source of pressure moving forward.
If we can see resistance broke, we can see move higher because momentum studies are on the rise from lower levels. The short-term trend is still negative until this happens. Resistance comes in at 99.60 and 100.85, while 1st support hits at 97.25 and 96.15
Coffee May ’19 Daily Chart