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December Coffee Rallies

Posted 10/10/2018 8:20AM CT | Adam Tuiaana

Bullish forces stepped in to take control coffee prices over the past couple of weeks, most likely due to a tighter supply outlook for the upcoming Vietnam crop. This short-covering rally pushed up past the 50-day moving average with strong momentum (and even gapped higher on the open on October 8th). The long-term supply/demand outlook is bullish, but for the time being, expect that the gap from October 8th will likely be filled. Bullish traders should consider initiating new long positions when said gap is filled and a subsequent pullback to the 107 level is complete.

 On the technical side, a rally through the 50-day moving average (and subsequent pullback to the 107 support level) was in fact bullish, complete with follow-through buying that lead December coffee prices to challenge the lows from July of this year. Consider using put options to take a bearish position and manage risk effectively.

Coffee Dec ’18 Daily Chart

Coffee Dec '18 Daily Chart

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Adam Tuiaana

Senior Market Strategist
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.
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