NY- Sell (1)- NY has suffered at the hands of a strengthening USD for the past week but Friday saw a turnaround with the 'C' staging a small recovery and closing up just under a cent. The talk of the market this year has been the pressure experienced by roasters to cover their 2010 commitments on the back of strengthening washed coffee differentials and a reasonably bouyant terminal market; last weeks decline will have given them some relief as they were able to buy the term and average on the way down. Technically speaking, NY is still fairly weak and we see the possibility of another fall back towards the mid 130's. However, the greenback is likely to play its part and any notable fall in the dollar will lend some support to the coffee market. Resistance then can be found around the 140 zone, 142.5 further up. To the downside, key support remains at 135 and 133.
Liffe- Neutral- Fridays short squeeze took us by surprise somewhat as Ldn, bouyed by a falling dollar and rally in NY climbed and closed $33 up on the day, erasing much of last weeks losses. March managed to close above the important 1350/60 level and this could provide some rest-bite from the current downtrend. A weakening dollar is likely to lend some support and may even encourage some tentative longs. However, in the mid to long term, a challenge and close above key resistance at 1400 and most notably 1425 is required for a more sustainable push Northwards. We remain neutral today noting support at 1320 and 1295.
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- At Equatorial Traders we do not see coffee merely as a traded commodity. Our strength lies in the network of relationships we have built up over the last 16 years, covering all parts of the globe. Our main sources are: Brazil, Costa Rica, Ethiopia, Guatemala, Honduras, India, Kenya, Nicaragua and Tanzania. We also source a number of "Exotic" coffees for our clients.
