Since coffee beans are priced in U.S. dollars, Brazilian farmers are selling more abroad to capitalize off the strong U.S. dollar and weak real currency. Brazil is the largest exporter of coffee beans. According to the International Coffee Organization, world exports were at a record 111.7 million bags last year, with Brazilian shipments rising 15% to 36.3 million. [Bad News for Brazil ETFs]
Looking at the weekly continuation chart for Coffee futures going back to 2011, we note what might be a double-bottom formation, as the lows made back in September of this year could be a failed test of the major lows made back in November 2013. Prices are currently above the 20-week moving average (MA) but remain below the 200-day MA which is currently near the 155.00 price area. The 14-week RSI has turned neutral with a current reading of 53.30. 113.35 is seen as support for the front-month future, with resistance seen at 147.35,” adds Options Express.
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN
