Nataly Kambur
The September futures on coffee rebounded up to 134 cents per pound. The reason is that major investors like various invest funds closed their short positions because of poor weather forecast for major Brazilian coffee-growing provinces. Still the forecast is not worrying anymore. So, the price went back down to 120 cents per pound.
Bearish factors:
· The 4th consecutive year of surplus
· Brazil’s record-breaking harvest
· Weaker currencies in coffee-growing countries
· The weakening of the eurozone economy
· An economic slowdown in China
Bullish factors:
· Lower expectations of coffee exports from Vietnam by 30% (y/y)
· Diseased coffee plants in Central America
As for seasonality, the bias is bearish until mid August.
The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of coffee:
Nataly Kambur
