Coffee prices have fallen off nearly 29% in the last six months and are trading at 14-year lows as an oversupply of old (Brazilian) crop continues to apply pressure on the market. However, the reversal from last Wednesday’s leg down indicates a longer-term low may be in place. Current prices have fallen below the cost of production for growers in Central America, with a reversal in the Brazilian currency from a 3 week low has provided underlying support. Dry weather is expected in parts of Brazil’s growing regions in the near term with harvest picking up through next month. The COT reports a sizeable net spec short position, which could fuel some short covering. Near term support for the June contract comes in around 91.30 with resistance around 94.20 and 95.40.

Coffee Jun ’19 Daily Chart

Coffee Jun '19 Daily Chart

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Alex Turro

Senior Market Strategist

Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.

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