Short-Covering in Coffee?Posted 03/12/2019 2:26PM CT |
Coffee for May delivery broke through the recent consolidation pattern today, but with the market increasingly oversold and the recent wet weather in Brazil largely priced into the market, coffee should be due for a short covering rally. Last week, coffee ended negative for the fifth consecutive week over the past six weeks (down 1.70 cents or 1.7%). The Brazilian currency has recovered slightly but is trading near last week’s ten-week low. Coffee may find some support from reports of poor weather with dryness and heat expected in Vietnamese growing areas over the next couple weeks. As of the COT March 5 report, the net spec short position is over 75,000 contracts with today’s price action and close indicating the downside extension to 9465 may have just been a stop hunt. The next upside target can be seen around 9780 with support seen near today’s low around 9460.
Coffee Apr ’19 Daily Chart
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