Arabica Coffee Futures Forecast next week september 28 - October 3 2015 : The weather over the Brazil coffee belt is forecast for a cold front to pass over the main coffee areas over the weekend and the outlook for rain into the new week is positive, to continue to support the flowering of the next crop to come in 2016. There is meanwhile with the exception of the continued questions over the size of this new Brazil crop, little in the way of supportive fundamental news coming to the coffee markets for the present.
The El Nino weather phenomenon that is currently in play within the Pacific Ocean, is meanwhile anticipated to be a positive factor for the next 2016 Brazil crop, as it removes the prospects of overly dry weather for south east Brazil to set the flowering for the next crop and the ability of the trees to carry the crop to fruition. This new crop is already being forecast by trade and industry players, to have a potential to reach 60 million bags and one that would assist Brazil to bolster their residual stocks from these past two years of lower crop intake ahead of the 2016/2017 coffee year.
The new washed arabica coffee year for the coming October 2015 to September 2016 season is due to start in a week’s time for the large new Colombia main crop, the Indian crop. This is to be followed on before the end of the year, with a potentially larger new overall Mexico and Central American crop. This is still tending to fuel bearish sentiment. Whereas with the coffee already maturing on the trees, there is little threat of the prevailing mild El Nino having an effect upon the final stages of development ahead of harvest. The strength of this El Nino is meanwhile mostly forecast to remain mild and some relief for producers around the Pacific Rim, although may still be some concern for East, Central and Southern Africa that traditionally experiences the effects of an El Nino at the onset of their rain season. The strength of this weather phenomenon is related to the effect of rainfall surplus and deficit, that has in the past brought overly dry weather to Central America, wet weather to Colombia and Peru and dry weather to Indonesia, Central and Southern Africa.
The arbitrage between the markets widened yesterday, to register this at 47.26 USc/Lb., while this equates to a 39.95% price discount for the London robusta coffee market. This arbitrage remains relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,345 bags yesterday; to register these stocks at 2,023,605 bags. There was a further 5,692 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,489 bags.
The El Nino weather phenomenon that is currently in play within the Pacific Ocean, is meanwhile anticipated to be a positive factor for the next 2016 Brazil crop, as it removes the prospects of overly dry weather for south east Brazil to set the flowering for the next crop and the ability of the trees to carry the crop to fruition. This new crop is already being forecast by trade and industry players, to have a potential to reach 60 million bags and one that would assist Brazil to bolster their residual stocks from these past two years of lower crop intake ahead of the 2016/2017 coffee year.
The new washed arabica coffee year for the coming October 2015 to September 2016 season is due to start in a week’s time for the large new Colombia main crop, the Indian crop. This is to be followed on before the end of the year, with a potentially larger new overall Mexico and Central American crop. This is still tending to fuel bearish sentiment. Whereas with the coffee already maturing on the trees, there is little threat of the prevailing mild El Nino having an effect upon the final stages of development ahead of harvest. The strength of this El Nino is meanwhile mostly forecast to remain mild and some relief for producers around the Pacific Rim, although may still be some concern for East, Central and Southern Africa that traditionally experiences the effects of an El Nino at the onset of their rain season. The strength of this weather phenomenon is related to the effect of rainfall surplus and deficit, that has in the past brought overly dry weather to Central America, wet weather to Colombia and Peru and dry weather to Indonesia, Central and Southern Africa.
The arbitrage between the markets widened yesterday, to register this at 47.26 USc/Lb., while this equates to a 39.95% price discount for the London robusta coffee market. This arbitrage remains relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,345 bags yesterday; to register these stocks at 2,023,605 bags. There was a further 5,692 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,489 bags.
Arabica Coffee Futures prices Tehnical Forecast
I have added Fibonacci retracement levels of the move up from low to high. Price has marginally clipped the 88.6% level. This was outlined previously as the area for price to make a last stand. Price is now up off the canvas and having a crack.
The weekly candle is a bullish outside reversal candle. Nice.
The RSI shows a triple bullish divergence.
The Stochastic and MACD indicators have just made a bullish crossover thanks to the strong ending to the week.
The Momentum indicator show the downtrend has been losing momentum for many months now.
We are following a 7 point broadening top formation with points 1 to 5 in place. That means we are searching for a point 6 low. Yesterday's low may well be it but I must admit to having my doubts. Sure, price can embark on a significant rally now but it may fail to trade above the point 5 high at $225.45 and subsequently head back down to new lows.
I have drawn an Andrew's Pitchfork with added warning lines. We can see price is against resistance from the middle channel line. I expect price to punch on through shortly but resistance from the upper channel line may be more formidable. If price can overcome that then the upper warning line may represent a challenge. Overcoming that would likely see price head to new highs in search of a point 7 high. We will just have to monitor the price action and look for signs of turning back down
The weekly candle is a bullish outside reversal candle. Nice.
The RSI shows a triple bullish divergence.
The Stochastic and MACD indicators have just made a bullish crossover thanks to the strong ending to the week.
The Momentum indicator show the downtrend has been losing momentum for many months now.
We are following a 7 point broadening top formation with points 1 to 5 in place. That means we are searching for a point 6 low. Yesterday's low may well be it but I must admit to having my doubts. Sure, price can embark on a significant rally now but it may fail to trade above the point 5 high at $225.45 and subsequently head back down to new lows.
I have drawn an Andrew's Pitchfork with added warning lines. We can see price is against resistance from the middle channel line. I expect price to punch on through shortly but resistance from the upper channel line may be more formidable. If price can overcome that then the upper warning line may represent a challenge. Overcoming that would likely see price head to new highs in search of a point 7 high. We will just have to monitor the price action and look for signs of turning back down
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