RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The coffee market has been very weak as much of the trade continues to hold firm on the idea that production in South America is still on track for a bumper year.  However, how much longer can the market hold these lower values before producers decide that they would rather hold out than sell at such low prices.  I would argue that we are currently building up for another drop in the market that may take coffee to a level not seen in over ten years.   2017 and 2018 both look to have done what producers set out for after a terrible production year in 2016, giving us shortages in both the Robusta and Arabica blends.  Sadly, this has had an adverse effect on values that are now making it difficult for producers who would like to sell at better prices.  I feel that the trade should take a solid look at a possible bounce before the market takes in the next round of bearish news.  We may see coffee make it as low as 11250 before ultimately making its way back to values we are most accustomed to seeing. 

Coffee May ’18 Daily Chart

Coffee May '18 Daily Chart

Hector Galvan