December coffee futures (KCZ25) present a buying opportunity on more price strength.
See on the daily bar chart for December arabica coffee futures that prices have rallied from the July low, have just hit a two-month high and prices are trending higher. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the red MACD line is above the blue trigger line and both lines are trending higher.
Fundamentally, less-than-ideal growing weather in major coffee-producing countries has crimped supplies. Brazil and Vietnam have seen major droughts that have severely impacted crop yields. Meantime, world demand for coffee continues to rise steadily, especially in China. Supply chain disruptions have also limited coffee supplies on the world market in recent years.
A move in December coffee futures above chart resistance at today’s high of 344.70 cents would become a buying opportunity. The upside price objective would be 405.00 cents, or above. Technical support, for which to place a protective sell stop just below, is located at 320.00 cents.
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.
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