❗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.
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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
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