I am still holding a core position in JO, the coffee ETN, after taking partial profits yesterday morning.
I may very well lock in another piece before the weekend for the sake of discipline, but the 30-minute chart, below, is basing out quite well again, with $40 above the next hurdle to clear and hold above.
Furthermore, the fundamental case remains firm, with this article serving as just one example:
“Coffee is pretty much going solo on the upside after triggering more (buy) stops and attracting new fund buying ahead of postponed forecasts for rains in Brazil,” said Rodrigo Costa, head of the coffee desk at brokerage Newedge in New York. “Everyone is afraid of the unknown.”
Brazil’s worst drought in decades has clipped output and sent futures prices up 88% since the start of 2014, pushing up prices for consumers. But when unseasonable rains fell in July, some trees started to flower prematurely. The rains were followed by more dry weather, which could force coffee trees to drop the flowers and not produce cherries, the fruit that surrounds the seeds that are roasted to make beans.
Brazil’s coffee-growing areas are expected to remain mostly dry until the second week of October, according to Sao Paulo-based forecaster Somar Meteorologia. That lack of moisture could hurt arabica trees already weakened by Brazil’s drought.”
Hat Tip: 12631 member @StuOnGold for the article and commentary.
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