While coffee’s supply/demand outlook is still bullish, a likely record sized net spec long position has left the market vulnerable to profit taking and longs liquidating their positions. After reaching 10 year highs, coffee made a sharp reversal to the downside with a daily key reversal. When the market could not rally on Colombian production decline, however, a wave of profit taking and long liquidation took the coffee market well below its highs by the close. Guatemalas November coffee exports came in 56% above last years total, which is due in part to the increase in global demand since mid year.

The reversal yesterday is a short term bearish indicator. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below support. The next are of support hits at 23750 and 23345, while resistance is at 24900 and 25650.

Coffee Mar ’22 Daily Chart
800-826-2270312-373-4968Series 3 Licensed

Tony Cholly

Senior Market Strategist
Tony majored in Economics at Eastern Illinois University. He performed his thesis on the market price of corn in the market and the factors that affect it. Tony was drawn to futures trading because of the opportunity to have financial gains in an economic environment. He prides himself on working with customers one-on-one and developing a trading strategy based on the client's needs and wants.
Read More