Yesterday December Coffee made a new low at 115.05 and closed down 180 points. Today, December broke through that low to 114.75, but closed up 75 points at 116.20. These two new lows are record lows for the December 2015 coffee contact. Coffee did get down to 100.75 in November 2013 and previously was last in that range in December 2008.
Will we get that low again? The attached article from Morgan Stanley once again talks about currencies. Today the Dollar is moving higher, but still off of its high reached back in March. The Brazilian Real is making a new low. Even if the Real stabilizes, if the Dollar goes back up to its previous high, this market will go lower.
Today the market is responding to currency changes. Reports of the size of the crop just harvested and the flowering this fall will sooner or later influence this market and over ride the currency issue. As I reported recently Colombia is aiming for some bigger crops in the next few years. If Brazil has a good flowering this fall, we could see even further price erosions.