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Grasshopper, if we could only predict that Brazilian weather. Down below is one Soft/Coffee broker's view as of 5-28-204 on the coffee outlook.
Another 'long shot' could be in crude oil if it jolts $10 to $20 higher from current levels.
COFFEE: (Trading Hours: 8:15am-11:30am CST) (Report, as of 5/28 close) Fund buying pushed coffee prices to levels not seen since September 2000. Short-covering also added fuel to the upside as traders did not want to remain short this market ahead of the three day weekend. Prices have rallied over 1700 points since the middle of May. Temperatures in the Brazilian coffee-growing regions this week were about 5 degrees celsius. Cloud cover kept temperatures slightly above freezing. Cold fronts are expected in the next 7-10 days, but freezing temperatures are not expected. Overall, the Brazilian winter is expected to be cooler than normal. The threat for a frost runs through the end of July. The lack of producer selling also enabled the market to move higher. Brazil has begun to harvest their crop. If prices remain above freezing, the market may not be able to hold these higher levels. The market is also overbought, so we could see a correction in the near-term, especially if there is no freezing temps this weekend. However, the winter will provide underlying support. Funds and specs were already net-long over 19,000 contracts, as of 5/25, according to the Commitment of Trader's Report. Stocks in certified warehouses, as of 5/27, were at 4,942,005 bags with 102,576 bags waiting to be graded. Support for July comes in at 82.50. Resistance is at 86.50.
