Atico Trading Commentary

Good Morning!! The market stayed within a fairly tight trading range over the last few sessions. Bearish supply news is clashing with the oversold condition of the market and a shift to improving outside market forces this morning to spark some short covering support. March coffee closed 100 lower on Friday and this left the market down 410 points for the week (or 3.4% lower). Outside market forces were bearish as the market tested last week's contract lows but managed to hold. Vietnamese coffee exports last month were over 50% above November's levels and well above market forecasts, which indicates that nation's producers are starting to let go of their near-term supplies before a recovery in prices can occur.  While the upcoming 2016/17 Brazilian crop is still five months away from the start of harvest and understandably has a fairly wide range of estimates, continued rainfall over key growing regions in the state of Minas Gerais have increased the chances for a sizable increase over this year's crop.  Selling resistance is at 118.55 and 120.15. Close-in support is at 114.30 and 113.50. New lows count to 110.35 as next target.