As the weekly chart shows, May futures traded to a high at 96.95 on April 4 and settled at 95.35 cents per pound. May futures traded to a marginal new low at 91.25 earlier this week which was 0.75 below the September bottom which gave way to a recovery to over the $1.25 per pound level in October.
With coffee trading to its lowest price since 2005 this week, it is probable that the soft commodity is close to the bottom of its trading range. The 2019 harvest in Brazil is likely to be lower than it was in 2018. Moreover, the potential for a rise in the value of the Brazilian real could ignite a recovery in the price of coffee as the South American nation is the world's leading producer and exporter of Arabica beans.
Risk-reward favors a long position in the coffee market and a close at 96.45 or higher on Friday could be the start of a recovery in the beaten down commodity.