As of the writing of this article, the potential for a vaccine by years end is beginning to look more positive as this morning has the DOW Futures up by nearly 500 points on news that Moderna’s COVID-19 vaccine is reported to be proving effective in leading patients to produce anti-bodies  that can neutralize the novel coronavirus, which causes the disease. While this recent news may be sparking a buying frenzy this morning, it’s direct effect on the coffee market remains neutral.

As several states continue to rollback their initial re-openings due to the spread of COVID-19, we need to use common sense with simple math. At the very best, if restaurants that are permitted to remain open are at operating at 25% capacity, home coffee sales are not nearly enough to offset the gaping void of demand left unfilled by restaurants and coffee shops. In addition, favorable weather in key growing areas of Brazil is likely to add some selling pressure to coffee prices.  

From a technical perspective, failure to break above the 50-day moving average at the 105 level is likely to be a bearish signal. We now await a re-test of the critical 95 level in order to gauge whether or not coffee prices will continue to suffer more pressure.

Coffee Sep ’20 Daily Chart

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.