The last time coffee generated such a reading was late 2008. The DI was 93 and the price of coffee was approximately 112-115/lb. This setup was followed by a second round of accumulation in May 2010. A DI reading of 35, still bullish, reflected milder accumulation. The strong cluster of DI readings in 2008 and 2010 preceded a powerful rally that saw coffee rally from 134/lb to nearly 300/lb from May 2010 to April 2011.
Coffee’s DI surge after the sharp decline suggests strong accumulation once again. Is lid about to blown off the price coffee? The movement of money says coffee drinkers watch out.
Coffee COT Diffusion Index:
Headline: Coffee prices nearly double, with no relief in sight
Coffee prices — from generic to specialty brews — have been ticking upward for over a year with no end in sight.
The price of a pound of raw coffee beans has almost doubled in 12 months. Now consumers are cutting back, roasters are struggling and retailers are scrambling to cover costs.
With rising food and fuel prices, coffee drinkers are left to make tough choices about their caffeine habits.
Christina Sleezer of Fort Mill, S.C., isn't willing to give up coffee, but something had to give, because "I've got to get gas in my car."
So Sleezer, who works in health care, switched her family of five to generic, store-brand coffee as the price of name brands rose.
She said she refuses to pay $13 for a large can of Folger's or Maxwell House coffee when it used to cost only $8 or $9.
Kraft Foods Inc., makers of Maxwell House, raised prices 22 percent in March. Other price increases came from J.M. Smucker Co., the maker of Folgers, and Starbucks Corp.
Source: csmonitor.com
