| Is Coffee ready to Perk Up? Tuesday, November 08, 2011 |
Don't Forget Your Morning Cup of Joe
With all of the insanity out there today regarding the European debt crisis, MF Global and the great rip-off, US election wackiness, and of course the "occupy protestors", it is very easy to lose sight of opportunities that could be making you money. Of course the one thing most of you do is down at least one cup of morning coffee.
Last week Dec Coffee opened at 233.00 hit a weekly low of 223.65 and closed the week at 230.20. You can see on the daily chart below that 220 is the current price floor in this market. You can also see the last strong trend (down) ended a few weeks back and now ADX is at 19 showing no strength of trend. Weak trending markets confirm a range bound market, and you can see the bottom of the current range at 220. The top of the range looks to be 240 on up to 250. MACD is just over the signal line showing no momentum right now, and Stochastics is correcting from oversold territory, which is to be expected in a weak trending market.
At Trends in Futures I cover the markets each day in two daily videos. IF YOU ARE NOT COMPLETELY HAPPY WITH YOUR TRADING RESULTS-Take a 30-day trial to Trends in Futures and receive a free one-on-one telephone consult with yours truly to answer all of your trading questions.
On the weekly chart below you can see the current weekly range at 220-250 as well as the COT reports. On the old legacy report we see Commercials went from -13,847 contracts net short on October 28 to -9,565 contracts net short this past Friday. The more transparent disaggregated COT report actually has Producers (true commercials) -30,393 contracts net short, Swap Dealers (biggest banks) are 20,828 contracts net long and Managed Money at 7,442 contracts net long. You can see the market is once again bouncing up off the 220 price are. Watch the big money on this report because if you see Producers start adding to their net shorts and Managed Money starts adding to net longs the market with respond just like it did back in July 2010. View the weekly chart. Also read the fundamental issues regarding tight supplies and we could see a new strong trending market (watch ADX numbers). Will it be an uptrend? We shall see.
Have a prosperous trading week.
To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures
Fundamentals
Coffee prices remain weak as they try to hold above last month's 10-1/2 month low. Bearish factors include (1) ICO data showing global coffee exports rose +9.4% y/y to a record 103.1 mln bags in the year ending Sep 30, (2) ICO's hike in its 2011/12 global Arabica coffee output estimate to 78.761 mln bags from a Jun estimate of 78.335 mln, (3) Brazil's forecast for a 2011/12 crop of 43.15 mln bags, the largest off-cycle crop in 11 yrs, and (4) CeCafe's prediction for a record 2012/13 Brazil coffee crop of 58 mln bags. Bullish factors include (1) slack supplies with the -26% drop in ICE monitored U.S. coffee inventories since Jan 1 to a 11-1/2 yr low of 1.268 mln bags, and (2) ICO's statement that coffee supplies will be "tight" the rest of the year as stockpiles in producing nations stay near a 40-yr low of 13 mln bags.
Fundamental Outlook-Medium-Term Bearish -Coffee prices remain bearish as they attempt to hold above their recent 10-1/2 month low. Coffee production in 2010/11 rose +8.8% y/y to a record 137.9 mln bags (USDA), but production should fall -2.1% y/y 135 mln bags in 2011/12 Brazil's 2011/12 (Jul-Jun) production will fall -9.7% y/y to 49.2 mln bags on the off-year of the biennial cycle (USDA).
With all of the insanity out there today regarding the European debt crisis, MF Global and the great rip-off, US election wackiness, and of course the "occupy protestors", it is very easy to lose sight of opportunities that could be making you money. Of course the one thing most of you do is down at least one cup of morning coffee.
Last week Dec Coffee opened at 233.00 hit a weekly low of 223.65 and closed the week at 230.20. You can see on the daily chart below that 220 is the current price floor in this market. You can also see the last strong trend (down) ended a few weeks back and now ADX is at 19 showing no strength of trend. Weak trending markets confirm a range bound market, and you can see the bottom of the current range at 220. The top of the range looks to be 240 on up to 250. MACD is just over the signal line showing no momentum right now, and Stochastics is correcting from oversold territory, which is to be expected in a weak trending market.
At Trends in Futures I cover the markets each day in two daily videos. IF YOU ARE NOT COMPLETELY HAPPY WITH YOUR TRADING RESULTS-Take a 30-day trial to Trends in Futures and receive a free one-on-one telephone consult with yours truly to answer all of your trading questions.
On the weekly chart below you can see the current weekly range at 220-250 as well as the COT reports. On the old legacy report we see Commercials went from -13,847 contracts net short on October 28 to -9,565 contracts net short this past Friday. The more transparent disaggregated COT report actually has Producers (true commercials) -30,393 contracts net short, Swap Dealers (biggest banks) are 20,828 contracts net long and Managed Money at 7,442 contracts net long. You can see the market is once again bouncing up off the 220 price are. Watch the big money on this report because if you see Producers start adding to their net shorts and Managed Money starts adding to net longs the market with respond just like it did back in July 2010. View the weekly chart. Also read the fundamental issues regarding tight supplies and we could see a new strong trending market (watch ADX numbers). Will it be an uptrend? We shall see.
Have a prosperous trading week.
To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures
Fundamentals
Coffee prices remain weak as they try to hold above last month's 10-1/2 month low. Bearish factors include (1) ICO data showing global coffee exports rose +9.4% y/y to a record 103.1 mln bags in the year ending Sep 30, (2) ICO's hike in its 2011/12 global Arabica coffee output estimate to 78.761 mln bags from a Jun estimate of 78.335 mln, (3) Brazil's forecast for a 2011/12 crop of 43.15 mln bags, the largest off-cycle crop in 11 yrs, and (4) CeCafe's prediction for a record 2012/13 Brazil coffee crop of 58 mln bags. Bullish factors include (1) slack supplies with the -26% drop in ICE monitored U.S. coffee inventories since Jan 1 to a 11-1/2 yr low of 1.268 mln bags, and (2) ICO's statement that coffee supplies will be "tight" the rest of the year as stockpiles in producing nations stay near a 40-yr low of 13 mln bags.
Fundamental Outlook-Medium-Term Bearish -Coffee prices remain bearish as they attempt to hold above their recent 10-1/2 month low. Coffee production in 2010/11 rose +8.8% y/y to a record 137.9 mln bags (USDA), but production should fall -2.1% y/y 135 mln bags in 2011/12 Brazil's 2011/12 (Jul-Jun) production will fall -9.7% y/y to 49.2 mln bags on the off-year of the biennial cycle (USDA).
What about teas?
ReplyDeletewhat is your list of teas?