Technical Outlook for the Coffee Market, backed by fundamentals.
Fundamentals: The coffee Market has been in a strong bullish trend ever since a frost hit the brazil coffee belt in July / August 2021, followed by a period of drought. This left the world´s biggest producer of Arabica coffee with huge productivity losses for the 2021/2022 crop. That results in a really tight Arabica balance sheet for 2022, which could get worse through re-openings of coffee-to-go shops after Covid-19 lockdowns. The tense global logistic situation with low vessel space, exploding freight rates and shortage of containers and truckers is fuel to the already burning fire of less coffee supply than demand.
What can be examined from this is, that roasters tap into certified coffee inventories drowning them to 10-year lows, an extremely bullish factor ever since.
Technicals: Prices stay in an uptrend channel, that can be divided into a major channel and two minor ones. The structure stayed between those two lines while completing several Elliott-Waves. After a new ABC correction from the 160,00 cts high, prices could start a new 5-Wave up to test the upper line of the major channel at ~175,50 cts. The certified inventories sliding below the magical number of 1 million bags would support this move.
Certified Coffee Inventory
https://bilderupload.org/bild/1e8e25760-certified-stock
Chart
What can be examined from this is, that roasters tap into certified coffee inventories drowning them to 10-year lows, an extremely bullish factor ever since.
Technicals: Prices stay in an uptrend channel, that can be divided into a major channel and two minor ones. The structure stayed between those two lines while completing several Elliott-Waves. After a new ABC correction from the 160,00 cts high, prices could start a new 5-Wave up to test the upper line of the major channel at ~175,50 cts. The certified inventories sliding below the magical number of 1 million bags would support this move.
Certified Coffee Inventory
https://bilderupload.org/bild/1e8e25760-certified-stock
Chart
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