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

If you would like to learn more about soft futures, please check out our free Fundamental of Softs Futures Guide.