Excellent Crop Conditions Give Coffee Bulls Little Hope

Is it our love for the "black stuff" that has us drawn to this coffee market? We continue to have hope of a bottom in this trade and so far....no such luck.

Our trading partner Mike Seery has some thoughts for us this week....

The coffee market continues to go absolutely nowhere but slightly lower on the weekly charts as prices hit a new 4 year low trading below their 20 and 100 day moving average with extremely low volatility closing this Friday in the March contract at 117.75 and I had been recommending to be buying coffee last week with a very tight stop and that trade did not work, however it was a relatively small loss. Volatility in coffee in my opinion is almost at all time lows as prices really are very quiet for such a volatile commodity.

The problem in coffee is the fact that global supplies are huge with excellent crop conditions around the world with the possibility of prices getting down to the 100 – 110 level and I do think if you’re lucky enough to get those prices & you’re a long term investor I would be buying at major yearly support. When prices hit this low people stop growing and that’s what causes higher prices and when higher prices come in farmers grow more and that’s what causes lower prices but sometimes it pays to be patient. Trend lower, chart structure excellent.

Click here to get the rest of Mike's commodity calls this week.