Today, coffee went through a bit of a correction. March closed up 645 points at 1.2220.
Today was first notice day which is the day that the exchange begins to issue delivery notices for delivery of coffee to those traders that have bought contracts. So it appears that those traders who were short aggressively bought out of December. The buying of December the hit buy stops issued by those traders who were short thus accelerating the climb. Most of the action occurred from 9:15 to 9:30 when the market went up about 350 points and trading nearly 3,000 lots. And 1,500 lots were traded in the last 10 minutes which pushed market up so that it closed near the high for the day.
I have attached two articles about Robusta coffee. one of the articles says that Vietnam is withholding coffee and is not a seller.
Also here are some other technical comments:
Market has gotten off to any early push higher, aided by a Brazilian Real that has strengthened into 3.73. Upward stochastics along with the bottoming of the lower Bollinger band have also fueled the early fire….a classic post FND bounce.
Even though we have taken out the down trend line of resistance (118.00), off the tightening triangle I still believe the true test is found at both the 40 and 50 day moving averages.
Bollinger band levels
If history is any guide, tomorrow will be a reversal, but I would not plan on it. We may have seen the bottom!