Last week although the rest of the world was not on vacation or had a short week, coffee’s volume was light and the market traded in a fairly narrow range. But on Monday of this week March coffee moved down nearly 400 points. It then traded flat for two days. On Thursday it moved up over 400 points to right where it was before the Holiday. Except for two days during the past ten days March traded over the 40 and 60 day moving averages.
Today at the time of writing March is trading at 1.2600, up 110 points. If it closes at this level, it will be the highest close since October 21st.
I have attached three articles. One regarding weather forecast for Brazil. This article indicates that although the coffee growing areas of Brazil are receiving some rain, the moisture in the soil is still not at an adequate level. The second speaks to the current condition of the market. The third article is technical. It says that if the market closes at this level or, more specifically, above 1.2660 it would be a near term bullish sign. Open interest has more commercial shorts than longs. If the market looks like it is going higher, these traders could start to get out of their short position by buying the market which would just accelerate the accent.