COFFEE Analysis: Will La Nina heat reverse coffee price downtrend?

September 30, 2020

By IFCMarkets.com

Will La Nina heat reverse coffee price downtrend?

No rain is forecast for Brazil’s coffee growing areas for the next 10 days with temperatures expected to hit record highs, according to Somar Meteorologia. This week temperatures may reach 35 degrees Celsius. Even those crops that benefited from rain in the past week have only had 30 millimeters (1.2 inch) this month, just 40% of what was expected. Adverse heat is bearish for 2021 coffee crop. However, arabica futures are down more than 15% this year due to record shipments of Brazil’s exports after cooler and wetter conditions favored coffee growth last year. While dry weather is an upside risk for coffee price, technical setup is bearish.

Indicator VALUE Signal
RSI Neutral
MACD Sell
Donchian Channel Sell
MA(200) Sell
Fractals Sell

 

Summary of technical analysis

Order Sell
Buy stop Below 108.94
Stop loss Above 124.31

Market Analysis provided by IFCMarkets.com

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