Trader Special: Bears Decimate ICE Coffee Market
Coffee Charity Promotion,
Coffee Trade Documentary,
March 20, 2008
Chicago, IL -- ICE Futures US May coffee futures have
collapsed sharply in recent weeks as the bears have
decimated and destroyed the recent bull run in the
coffee market. ICE May coffee continues spiraling lower
Thursday, as the price hit the lowest level since
November 2007 in early trading.
ICE May coffee last traded down 545 points at $1.2750.
May coffee has tumbled precipitously from the $1.7190
high scored on Feb. 29.
The bull trend was destroyed and price has dropped back
below major long-term support levels from the monthly
However, the sell-off in coffee needs to be taken in
perspective, as commodities across the board have
collapsed in recent days.
"It's basically sector-driven," said Dan Vaught, futures
analyst at Wachovia Securities. "We are hearing some
talk funds are being squeezed on the liquidity side so
they have to sell."
From a technical perspective, coffee has pushed below
the key 200-day moving average this week. "Breaking
through that moving average and falling below $1.3000
was pretty negative," noted Vaught.
"From a purely technical perspective I'm not seeing much
support for coffee," he added.
However, Vaught did highlight the $1.2600 and $1.1800
levels as nearby support zones for the market.
He advised traders to monitor the crude oil market as
that commodity's action could lead action across the
Nonetheless, Vaught cautioned would-be coffee traders:
"I don't have a whole lot of good things to say. Even if
we do start coming back on the heels of a crude oil
reversal, given the sheer size of the breakdown, it will
be hard to sustain rallies (in coffee)," he concluded.