Coffee Sets Up For A Plunger
Expectations for a large increase in coffee supplies this afternoon by the Green
Coffee Association are sending coffee prices to their lowest price of the year.
Expectations are for up to a half-million-bag increase, which would put GCA
stocks at a five-year low. Favorable weather in Brazil is also weighing on the
commodity. Coffee is on the
Pullback From Lows List
and is registering three down arrows on the
Futures
Trend Matrix.
Pork bellies fell to a multi-month low Wednesday on weaker
movement of meat into CME warehouses. The break below the 84.900 area is key.
Even though the contract registered on the
Turtle Soup Plus One Buy list and is currently testing its trigger–also at
84.90–this area appears too heavy to hold. The 84.900 area is also the neckline
of a head-and-shoulders pattern. Pigs can’t fly.
Natural gas rocketed higher following Wednesday’s weak AGA
gas injections report. The weekly storage input report was at the low end of
expectations and aggravated the weak supplies situation that remains 25% below
year-ago levels. Demand for nat gas is being intensified by a heat wave in
California. Nat gas is used to generate electricity which, in turn, powers air conditioners. Prospects for steady US economic growth also fuels
demand for gas, especially in light of a rising number of (new) gas-fired
electrical generation plants.
Orange juice has moved on our watch list. Juice now registers
on all three low volatility lists. Because of the greater volatility
differential, the 10/100
Low Volatility List here may be particularly poignant. FCOJ is starting to
show rising bottoms within its extended consolidation, a potentially
constructive sign. Still volatility differentials are not directional
indicators.