Coffee on a Bull RunPosted 11/26/2019 9:17AM CT |
Continued strength in U.S. stocks, along with supply issues have driven December coffee prices to highs not seen since July of this year. For quite some time, traders have been waiting on key harvest numbers from Vietnam, and they seem to have gotten them. Our friends at the Hightower Group have reported that “Vietnam has seen delays in their harvest this year, and there are some early doubts that their 2019/20 production will reach 30-million bags”. This appears to be enough to keep prices for December coffee in solid support for the time being.
On the technical side, we’ve seen a strong pullback in December coffee prices today, but this will likely be followed by strong buying in the coming days, with a target of the 119-resistance level in the near term. A break above the critical 119 resistance level will likely spark continued aggressive buying over the next couple of weeks. A break above the 120 level will begin to make a strong case for a reversal in the trend to the upside. It may be a great time for bulls to jump in again once the pullback reaches 114 support level.