❗Weather anomalies cause supply concerns, which drives the price of coffee significantly higher
Coffee (COFFEE) futures surged 11% during today’s session, reaching levels not seen since 2014. Only within the last 3 days, the prices of this commodity jumped by almost 20%!
Weather anomalies, especially severe drought in Brazil, as well as unexpected low temperatures that have occurred recently in this region, contributed greatly to this situation. Obviously, this has a negative impact on the supply side. That's not all, because the demand for coffee is rising dynamically due to the reopening of many developed economies, where a significant portion of the population is vaccinated. Numerous cafes are starting to operate normally, which attracts more customers while the inventory levels are starting to decline due to supply issues. All these factors have led to a massive upward move in recent days.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Coffee (COFFEE) prices continue to rise sharply, currently gaining nearly 8%. On the daily chart one can see that today’s session started with a bullish price gap and the price broke above the upper limit of the upward channel. Daily high is located at $ 194.54 and it is possible that the $ 200.00 level may act as a psychological resistance. On the other hand, if sellers manage to regain control, the zone between $ 164.00 and $ 166.00 could act as the first major support. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
