After nine out of ten up days with a climb of over 1200 points the July coffee contract finally corrected to close at 132.00, down 445 points. Although July only had a trading range of 100 point in the last ten minutes, the period recorded the highest volume for any other ten minute period during the day. Someone was trying to push down and there was good support. Will the support hold??
This downward activity is all very interesting since according to the attached Reuters report Brazil forecasts a smaller crop next year than this year. Traditionally, the Brazilian government underestimates the crop in order not to encourage selling by over estimating the crop. Also, I have no idea how next year’s crop can be estimated if they have not finished harvesting this year’s crop. But it does appear, at least for yesterday (a down day) and today this report is being ignored.
This year’s crop is less than 50% harvested and at present there is only speculation about its size.