Will ICE Arabica Coffee Futures Challenge the 2022 High in 2024?

In Andrew Hecht’s 2023 recap on soft commodities on Barchart, he highlighted the 12.55% annual gain in ICE coffee futures, with Arabica coffee bean futures at $1.8830 per pound on December 29, 2023. Before the end of last year, he asked if it was the time to hop on the emerging bullish trend in coffee futures. The recent price action and rallies in other soft commodities indicate that coffee futures could have lots of upside potential from the current price levels.

Arabica coffee futures have made higher lows and higher highs since October 10, reaching a $1.45 per pound low. The most recent high of Arabica coffee futures is $2.0390 per pound on December 19, and they remain in a bullish trend. Robusta futures are on a bullish path, with Arabica futures moving 53.7% higher since the November lows, while Arabica futures were up 35.4% as of February 9.

Frozen concentrated orange juice futures have also experienced explosive moves, with the FCOJ rally taking the price to a $4.3195 per pound high in October 2023. Cocoa has been on an express train to the upside, with nearby ICE cocoa prices moving to a $6,030 per ton high last week. Sugar and cotton are in bullish trends, with sugar futures taking the price to the highest level since 2011.

Coffee could have further upside as soft commodities have led the asset class in 2023 and early 2024. Soft commodities were the best-performing sector of the commodities market in 2023, and the bullish price action is continuing in 2024, with cocoa leading the way on the upside. However, sugar, cotton, and FCOJ prices are all higher than the 2023 closing levels on February 9. Arabica coffee futures have lagged behind the other softs, which could mean the coffee market could have some catching up over the coming weeks and months. Technical resistance for Arabica coffee futures is at the $2.0390 level, the December 2023 high, $2.0745, the April 2023 peak, and $2.6045 per pound, the February 2022 peak, which is a gateway to the 2011 high at over $3 per pound.

Read More @ Barchart

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