It appears as if the bullish forces are still in charge of coffee prices, continuing the momentum that’s been in place over the past month. The continued strength in December coffee prices continues to be a straight-forward tight supply outlook for 2019/20. What may have started as a significant short-covering rally, has now turned into a bullish long-term supply/ demand outlook, which looks like a solid reversal to the upside in December coffee prices. Bullish traders should consider initiating new long positions on corrective pullbacks.

On the technical side, a rally, temporary consolidation, and ultimate break above the 200-day moving average (and subsequent close above) was in fact bullish, and triggers technical buy signals for traders. Consider using put options to take a bearish position and manage risk effectively.

Coffee Dec ’18 Daily Chart

Coffee Dec '18 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.