Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

What’s Brewing? Coffee At Four-Month Highs, That’s What

By Investing.com (Barani Krishnan/Investing.com)CommoditiesNov 19, 2019 11:01
uk.investing.com/analysis/whats-brewing-coffee-at-fourmonth-highs-thats-what-200434384
What’s Brewing? Coffee At Four-Month Highs, That’s What
By Investing.com (Barani Krishnan/Investing.com)   |  Nov 19, 2019 11:01
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

With all the manufactured excitement over U.S.-China progress and oil bulls’ fantasy over where crude prices could go, it’s a little easy to lose sight sometimes of the commodities that should really be toasted for their performance.

One of them is coffee.

Coffee Daily Chart - Powered by TradingView
Coffee Daily Chart - Powered by TradingView

Arabica coffee on ICE Futures U.S. is trading not far from four-month highs hit almost two weeks ago—and trade expectations are enough to keep it steaming for a while.

Arabica is up 7% on both the year and the month—in fact the second month in three where it’s risen as much.

At Monday’s settlement of $1.092 for a lb, benchmark arabica for March delivery is just slightly adrift from July highs of $1.099 reached on Nov. 8.

Jack Scoville, veteran coffee analyst at Chicago’s Price Futures Group, thinks $1.11 will be a good resistance to test for benchmark arabica.

Arabica, Robusta Both On The Uptrend

And it’s not just arabica that’s winning the “softs” crowd—a commodities monicker for the followers of coffee, cocoa, sugar and orange juice.

Robusta coffee on U.K.’s Liffe is also trying to recover from a poor patch through most of this year, rising more than 5% so far in November.

At $1,364 per tonne, robusta for January delivery hasn’t strayed too much either from Thursday’s four-month high of $1,441.00. Scoville puts first resistance at $1,460, following which, he says, it could get to $1,480.

So, what’s brewing with coffee?

Dry Weather In Brazil

In arabica’s case, it’s a dry spell in top grower Brazil, where rain itself has become a bit of a prized commodity.

Says Mike Seery, who discerns commodity trends for his Seery Futures forecasting agency in Plainfield, Illinois:

“Major concerns about drought developing in Brazil have pushed arabica prices off of a 14-year low.”

“If the hot and dry weather conditions persist, I would think prices could touch the contract high hit on July 5 at $1.19. But at this point, the volatility should start to increase as the market can have tremendous price swings daily.”

Investing.com’s Daily Technical Outlook rates arabica as a “Strong Buy”, predicting a top-end resistance of $1.098 per lb.

It also notes that arabica has smashed past most price barriers set in recent days, and is now trading above its 200-Day Moving Average.

Scoville largely concurs with the weather-impact laid out by Seery on arabica:

“The Brazilian crop is developing but some exporters say they are out of previous crop supplies to sell.”

“Reports from Brazil indicate that flowering is off to a very good start. Rains are expected again in coffee areas this week. Overall, the coffee areas remain in a rain deficit but have had some timely rains to start the flowering season.”

Sellers’ Reserve In Vietnam

As for robusta, he said production had slowed from top grower Vietnam, which appeared to be resisting lowly offers from some buyers.

Says Scoville:

“The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low to provide profits. Vietnam exports remain behind a year ago. But the market anticipates bigger offers as producers and traders will need to create new storage space and are expected to do this by selling old crop coffee.”

“Vietnam crops are thought to be big despite some uneven growing conditions this year. A tropical system hit production areas in the last couple of weeks and so far there have been reports of some damage and losses.”

Investing.com’s Daily Technical Outlook rates robusta as a “Strong Buy” from a “Sell” a month ago, predicting a top-end resistance of $1,447.66 for the January contract—a generous climb of $83, or 6%, from current levels.

What’s Brewing? Coffee At Four-Month Highs, That’s What
 

Related Articles

What’s Brewing? Coffee At Four-Month Highs, That’s What

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email