Coffee Prices Lower On Rain Forecast
Coffee Futures—Coffee futures in the December contract is trading higher by 65 points at 99.00 a pound after settling last Friday in New York at 102.75 down about 375 points for the trading week unable to crack the 105 level which was hit earlier in the week.
I have been recommending a bullish position from around the 101 level and if you took that trade continue to place the stop loss under the 14-year low which stands at 93.40 as I want to give this trade some room due to the increasing volatility. Fundamentally speaking Conab cut its Brazil 2019 coffee production estimate to 49 mln bags from a previous estimate of 50.9 mln bags as adverse weather cut coffee yields as coffee posted a 6-week high last Wednesday on crop concerns in Brazil.
Coffee prices are now trading right at their 20-day but still below their 100 day moving average as we’re looking for some fresh fundamental news to dictate short-term price action, however I will continue to place the proper stop loss and play this to the upside as I think the downside is very limited especially if the hot and dry weather conditions persist in Brazil as that is the main factor.
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