The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Since I wrote about Coffee Arabica last week there has been little to cheer consumers as the unseasonably dry weather in South America and specifically Brazil has continued to drive the price higher. Arabica has now increased by 54% since the start of 2014 and has seen the RSI move heavily into overbought territory, above the 80 level.
The direction of this particular commodity is currently being controlled by traders and producers. Only a sustained period of rain will dampen the fears of coffee growers that they will suffer a shortfall to global demand.
As if that were not bad enough those coffee drinkers with a sweet tooth will be suffering a double blow, as a large percentage of sugar-growers are also suffering from the same environmental issues.