Coffee Surges 9.5% As Speculators Buy In Technical Rally
NEW YORK -- Coffee futures on the Coffee, Sugar & Cocoa Exchange charged higher Friday in a rally fueled by speculative buying.</br></br>The most active December contract tacked on 9.5% to end five cents up at 57.85 cents a pound after a shopping spree the coffee pit hadn't seen since late April.</br></br>Coffee futures have been in an overwhelmingly bearish trend since peaking at $3.18 a pound in May 1997. In the nearer-term, coffee drifted below what is considered as an average cost of production -- 80 cents -- in October 2000 and hasn't looked back.</br></br>The break to the upside came at the bulls' insistence, as they pushed the market with an eye on speculators' preplaced buy-orders above 54 cents for December futures, and 50.5 cents on the September contract.</br></br>Once those levels were pierced, the buying wave came with a vengeance. Buy-stops were abundant and ripe, and their triggering fueled the rally that absorbed all the producers' selling around.