The Market Word - Coffee
Global Coffee demand should hit 136m tonnes by 2012! There are many factors to cover when reviewing the supply picture for Coffee as it is produced in Hawaii, Mexico, Puerto Rico, Guatemala, Costa Rica, Columbia, Brazil, Ethiopia, Kenya, Ivory Coast, Yemen, Indonesia and Vietnam. It is thought that the price of the Arabica Coffee should stay inflated at auction as Columbia has a smaller output. Brazil has had very dry conditions this November, they are expecting a great deal of rain to come in today and tomorrow to saturate the crops. While they may have lost some flowering buds to the dry weather, the potential wet weather could still possibly compensate for the previous damage. It is thought that Brazil may come in with a larger crop this year. Indonesia has produced an early crop that may ease the supply shortage of that area for now. The debt crisis in Europe and the inflated US Dollar may suppress Coffee prices as the world marketplace is potentially affected by the currency fluctuations and the tangible goods demands. Coffee should potentially increase in demand and the supply numbers may be lacking going into 2012.
Technically, the March Coffee is in buy mode on the Daily Chart according to the Wilder's Parabolic SAR.
Sample Trade Opportunity!
Buy March Coffee (EKCH12) at $233.00. If filled, Sell EKCH12 at $231.00 Stop or sell EKCH12 $243.00 Limit (Target). The risk on this trade is $750.00 plus fees and commissions. The profit potential on the trade is $3,750.00 less fees and commissions. The expiration is March 20th.