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Look Out Below! The Bears Are in Control as Coffee Prices Slump

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

July coffee futures (KCN26) present a selling opportunity on more price weakness.

See on the daily bar chart for July coffee futures that prices are trending down and this week hit a nine-month low. The bears are in firm near-term technical control, to suggest more downside in the near term.

 

Fundamentally, a global coffee supply surplus has reversed years of deficits that were driven by poor weather and supply chain disruptions. Big coffee crops in major growing countries are also price-bearish for coffee futures.

A move in July coffee prices below chart support at this week’s low of $2.6800 would become a selling opportunity. The downside price objective would be $2.1500 or below. Technical resistance, for which to place a protective buy stop just above, is located at $2.9300.

www.barchart.com

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. 


On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

 

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