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Commodities Take a Break, Coffee Gets Support

Updated: May 6, 2021

We have been talking about the "macro" trade recently with the entire #commoditymarket getting a boost from the weak #USdollar and fundamentals in the #Ags. Today the #markets are taking a bit of a breather and #coffeemarket is no exception.

The #BRL firmed hard though, ~2% on the day and this is supportive for #Coffee. With KC closing above that 145 resistance level (which is technically significant) and BRL doing a lot of its move after KC's close, Coffee is in a very strong position for tomorrow.

Even without the #fundamentals this would put coffee in a very strong position, but the bulls will undoubtedly be talking about how this was inevitable because of the damage to the #Brazil 21/22 crop.

I would agree with the Bulls, I follow the fundamentals and I have it on good authority that the crop will be down +30%. However, I am also extremely cautious here, the kind of rally that Coffee has ridden so far means #volatility is the order of the day, and when 5c moves up become expected, 5c moves down are inevitable.