May coffee has been able to hold support above the 116 area, which should be good news for those traders with bullish bias, this recently rally mostly on the back of limited supplies in Brazil, and ongoing issues earlier related to a lack of shipment delays. Our friends at The Hightower Group made a great observation regarding people still have demand but that demand has shifted from people drinking coffee in restaurants, to that of people drinking coffee from home instead. Regarding this shift in demand, The Hightower Group reported that “coffee’s demand outlook has been resilient as stronger supermarket sales have offset lower restaurant and coffee shop sales.”
We continue to see strong levels of volatility as the world continues to battle the COVID-19 virus. Commodities will continue to “price discover” aggressively, as the underlying fundamentals swing back and forth with massive volatility.