Here Are My Coffee Thoughts

Coffee Futures---Coffee futures in the March contract is currently trading at 104.00 a pound after settling last Friday in New York at 101.60 up about 250 points for the trading week.

In my opinion I believe prices have bottomed out as there are pockets of dryness in the country of Brazil, however prices have not reacted just yet, but if that situation continues prices could move substantially higher.

Fundamentally speaking this commodity remains bearish as we have a 4 year high inventory level of 2.166 billion bags coupled with the fact that they raised the Brazilian crop to 61.7 million bags which would be an all time high, however it is a long growing season as that situation could change very quickly.

The main reason why I recommended a bullish position was the fact that there was a technical breakout to the upside when prices cracked the 105.30 level and if you took that trade continue to place the stop loss under the contract low of 98.55 as an exit strategy as the risk/reward are in your favor. Let's see what next week's trade brings as I certainly think the volatility will start to expand as it still remains historically extremely low.




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