Coffee Futures Rise on Fundamental Shift

Dec 19 coffee futures are on the rise with strong near-term demand and favorable technical action. Fridays session saw coffee take out the previous 7 bars on the daily charts which was a very bullish indicator, and it has continued to follow through with today on track to be the 3rd positive session in a row. There is still a heavy net short in this market which offers an abundance of short covering fuel to sustain rising prices should the global sentiment remain optimistic. Its important to note supportive fundamentals for the near to intermediate term as reports indicate Brazils largest co-op has already sold out of all their new crop supplies, suggesting a very strong demand tone. Calendar spreads have also been rapidly becoming less negative which is a good sign that the supply/demand dynamic is shifting to bullish. While positive weather factors for next years crop had presented managed money funds an opportunity to sell short and try to press prices down further, the conversation should start changing to near term fundamentals. If news on coffee continues coming out bullish and we see a tighter supply situation, coffee could be high performer for bulls. To learn more about chart patterns and indicators or how to use them you may download our free Technical Analysis Trading Guide here, Or usethe link below.

Coffee Futures Rise