Coffee prices have been falling since the beginning of the year due to oversupply, from $1.32 to a low of $0.92 this September. Prices then staged a brief relief rally in Oct-Nov back to $ 1.26 due to massive short covering; however, the rally has seemingly ran out of steam. At the time of writing, benchmark ICE Coffee future (Mar 19) was trading lower at $1.03.
ICE Coffee C Future, Weekly Continuous Chart – Source : data.tradingcharts.com
Looking back, I suspect that the rally was largely due to combination of three factors: