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Soybeans Higher 3rd Day In A Row, Coffee Prices Hit New Highs

Michael Seery

Soybean Futures—Soybean futures in the January contract is trading higher for the 3rd consecutive session up another $0.04 at 8.82 a bushel bouncing off of major support rallying in my opinion on oversold conditions as prices have fallen out of bed over the last couple of weeks. Optimism about a possible Chinese trade agreement has sent prices up in the last several days, however I still remain bearish as prices are still trading under their 20 & 100 day moving average is the trend remains to the downside.

I have been recommending a bearish position from around the 9.23 level over the last several weeks and if you took that trade the stop loss has now been lowered to 9.09 & in tomorrow’s trade will be lowered once again to 9.04 as the chart structure will continue to improve on a daily basis therefor the monetary risk also be reduced.

This is my only grain recommendation as I’m keeping a close eye on a possible bullish position in corn so continue to place the proper stop loss as the grain market is sitting in limbo until some type of agreement with China comes about as we will have more clarity on that situation come December 15th.

TREND: LOWER 

CHART STRUCTURE: EXCELLENT

VOLATILITY: LOW

Coffee Futures—Coffee futures in the March contract continues its bullish momentum to the upside up another 325 points at 124.50 a pound hitting a 12-month high as this is the strongest soft commodity at the current time.

Presently I am not involved, however I’m certainly not recommending any type of bearish position as that would be counter-trend trading and if you are long a futures contract place the stop loss under the 10-day low which stands at 114.15 as an exit strategy, however the chart structure will start to improve on a daily basis therefor the monetary risk will be reduced.

Coffee prices are trading far above their 20 and 100 day moving average as this trend is strong to the upside as fundamentally speaking a supportive factor for arabica coffee Coex Coffee International on Wednesday said that Brazil’s coffee crop will be closer to 54-55 million bags well below the USDA’s forecast of 58 million bags.

There are major concerns in key coffee-growing regions in the country of Brazil which is the largest producer in the world about a lack of rain as I have witnessed this before and it will explode to the upside and if it continues as the volatility will increase substantially as all you have to do is look at the 2014 chart as that was the last drought that this commodity has experienced so stay long.

TREND: HIGHER 

CHART STRUCTURE: IMPROVING

VOLATILITY: INCREASING

This article was written by Michael Seery (CTA—COMMODITY TRADING ADVISOR)  www.seeryfutures.com

This article was originally posted on FX Empire

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