Coffee Slips on Signals That Recent Rally Went Too Far

Coffee futures dropped for a second day in New York, paring back part of a speculator-driven rally that had taken prices to the highest in three months.

The recent gains had pushed the most-active contract’s relative strength index firmly into overbought territory, a signal that prices may have risen too far, too quickly. The move higher in prices was driven largely by market speculators covering short positions and as thin trading volumes added to volatility.