World harvest forecasts may be excessively optimistic
Marex Spectron forecasts a global coffee deficit in the 2017/18 agricultural season in the amount of 1.7 million bags (60 kg). Will Robusta prices rise?
Previously, the US Department of Agriculture (USDA) published a very optimistic forecast for the world coffee harvest in the 2018/19 season. World production, according to the USDA, will be 174.5 million bags (60 kg), and consumption - 163.6 million. The difference will be used for increasing world reserves. Due to these expectations, in 2018, the cost of Robusta coffee fell by 16% to the low since March 2016. Now the dynamics of prices may strongly depend on weather.
On the daily timeframe, Robusta: D1 remains in a downtrend. It has slowed down and a number of technical analysis indicators have formed buy signals. The further price correction is possible in case of a reduction in world harvest and an increase in demand.
Summary of technical analysis
Position Buy
Buy stop Above 1540
Stop loss Below 1460
Marex Spectron forecasts a global coffee deficit in the 2017/18 agricultural season in the amount of 1.7 million bags (60 kg). Will Robusta prices rise?
Previously, the US Department of Agriculture (USDA) published a very optimistic forecast for the world coffee harvest in the 2018/19 season. World production, according to the USDA, will be 174.5 million bags (60 kg), and consumption - 163.6 million. The difference will be used for increasing world reserves. Due to these expectations, in 2018, the cost of Robusta coffee fell by 16% to the low since March 2016. Now the dynamics of prices may strongly depend on weather.
On the daily timeframe, Robusta: D1 remains in a downtrend. It has slowed down and a number of technical analysis indicators have formed buy signals. The further price correction is possible in case of a reduction in world harvest and an increase in demand.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands are widening strongly, which indicates high volatility.
- The RSI indicator is below 50. No divergence.
- The MACD indicator gives a bullish signal.
Summary of technical analysis
Position Buy
Buy stop Above 1540
Stop loss Below 1460