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Coffee Spread Betting Markets Near 10 Year Highs
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The 20% rise in coffee prices over the past few days has largely been down to concerns about poor crop harvests in Vietnam and Central America.
The market also has concerns about the forthcoming harvest in Brazil which could cause a shortfall in global supplies of the commodity.
The last time they were at these heady levels was in 2008, just prior to the commodity price crash and the pre-credit crunch sell-off.
They are still short of the peaks that they put in then, but nevertheless they are still getting close to their 10 year highs.
A break above these 10 year highs has the potential to target levels last seen in prices in the mid 1990’s, when coffee traded well in excess of 250c and as high as 318c in May 1997.
The current up trend has support around the 135c area as well as around 110c in the longer term.
The Organisation for Economic Co-operation and Development (OECD) alongside the UN Food organisation is expected to publish forecasts tomorrow for market trends in agriculture over the next 10 years.
Given the fact that the last two years have seen relatively weak harvests, the long term outlook is expected to point to higher prices.
This is borne out by the last 10 years which has seen the upward pressure on prices maintained and this is expected to continue while trading above the up trends that have been in place on a long term, and short term basis.
Spread betting, CFDs and FX are leveraged products and carry a high level of risk to your capital. It is possible to lose more than your initial investment. These products may not be suitable for all investors, therefore ensure you understand the risks involved and seek independent advice if necessary.
The above content does not constitute investment advice. Neither CMC Markets nor Spread-Betting.org accepts any responsibility for any use that may be made of the above.
Article approved by CMC Markets. CMC Markets is authorised and regulated in the UK by the Financial Services Authority, registration no. 173730.
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With financial spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital. Please familiarise yourself with the risks that are involved and before trading, ensure that financial spread betting matches your investment objectives. Seek independent advice where necessary.
Coffee Spread Betting Markets Near 10 Year Highs - edited by D. Jones, 21 June 2010.
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With spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital so please familiarise yourself with the risks that are involved and, before trading, ensure that spread betting matches your investment objectives. Seek independent advice where necessary.
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* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.
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