May coffee prices are noticeably down this morning, after sideways consolidation for the fair part of March. Dry weather is forecasted for key growing areas of the world’s second largest producer, Vietnam. This, weighed against desirable weather conditions in Brazil (the largest producer in the world) have made for a continued-tight trading range and light volatility. However, should we see Vietnam’s forecast change to produce some wet weather, coffee prices may likely surge from the current 9650 level to the 102+ levels. 

On the technical side, the March 12th low of 9465 has been formidable support for May coffee prices, and I would expect this area to hold, at least through the end of March. The main area of attention for May coffee prices will be the aforementioned 9465 range low, and the 9870 corrective high from March 14th should act as strong resistance. These are great areas to monitor because should either of these areas been violated, we may likely see some strong follow through buying or selling shortly thereafter.  With such volatility on the horizon, I would advise using options to manage risk and gain exposure to a potentially large move in May coffee prices.

Coffee May ’19 Daily Chart

Coffee May '19 Daily Chart

Adam Tuiaana

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.