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September Coffee Falling Fast

Posted 07/18/2018 12:01PM CT | Adam Tuiaana

The struggle continues with September coffee prices. Traders continue to be focused on the extremely bearish supply side of the equation. Although we’ve seen an upswing in the demand for coffee, The Hightower Group reported that there is still a “record high Brazilian crop to absorb”. Note to traders, when the words “record high” are used when describing the upcoming supply situation (for any crop), use caution when taking a position against such news.

Weather forecasts in major growing areas of both Brazil and Vietnam continue to be positive, adding continued pressure to September coffee prices. Also, let’s keep in mind that nothing has really changed from tariff talks, which will perpetuate uncertainty and the likelihood of a “risk-off” mentality when analyzing many of these commodities.

On the technical side, a race to the 106.90 corrective low from July 6. If this level is violated, we can potentially see some volatile follow-through selling, down to the 105 level fairly quickly.

Coffee Sep ’18 Daily Chart

Coffee Sep '18 Daily Chart

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Adam Tuiaana

Senior Market Strategist
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.
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