Everyday I send out a #certifiedstocks #report to my free and premium subscribers because it is one of the most relevant and useful benchmarks for the #coffee industry to “calibrate” to. Yet one of most common questions that we receive is for clarification on the #certstocks. “Why should we care about the certified stocks?” To be fair, there are several important and not well understood facets to this report. In this article we will outline what this report shows and how to

Yesterday, #Arabica #certifiedstocks dropped an impressive 70k and the #calendarspreads are going bananas. Calendar spreads in Arabica #coffeemarket are notoriously boring (unlike #Robusta), and yet this year spreads have been ANYTHING BUT BORING. #Spec interest in the spreads has driven a lot of the #bullish #price action there but this has been instigated by some very real #fundamental concerns. In this article, we will look at what the calendar spreads are, why they refl

Over the last month #certifiedstocks in #Arabica #Coffee dropped 120k bags, 33,000 of which happened on October 5th. This is a bellwether of stock declines to come across destination markets over the next several months. A few weeks ago I wrote about how the Certified Stocks in Arabica had changed with the addition of the semi-washed #Brazils to the contract. In that post I argued that the addition of Brazils to the contract enabled the certs to better represent the global Ar

A few months back I wrote about the +22 inversion in #Robusta #coffeemarket and how that market gets "squeezed". Since then, the F/H more than doubled to a high of $67/MT. This is not simply a few trade houses "playing games" with the #stocks, but indicates some strong #fundamentals. I would argue that despite the impending #Vietnam crop, this #calendarspread still has #bullish fundamentals behind it and could even rally to new highs. Vietnam Before, I talk about why this c

One of the most important data points to follow in the #coffeemarket is the certified stocks. Every day, I send out my #Coffee #CertifiedStock reports to my subscribers (available for free here) and the reason that I do so is because this report is one of the most useful ways to estimate #fairvalue of #coffeefutures that we have. However, this relationship has changed dramatically in the last year and I want to show how we need to adjust our thinking on this report. Over the

(Edit: An earlier version of this article erroneously quoted the MiFiD position limits rather than the ICE Eur Delivery Limits. This has been corrected.) Those of you following the #Robusta #market have seen why this #commodity has the nickname "GoBusta". Since Jun 21st the U/X #calendarspread this market has gone from full carry at -22 to a $24 #inversion as of 11:18am this morning. This likely reflects a "squeeze" in the market exacerbated by firm connie #diffs, #season

Those of us following the #coffeemarket, know that there was heat damage that caused flowers to abort from the #coffee trees in #Brazil, the world's largest producer of #Arabica. But what does that actually mean for coffee prices? First, we are talking about permanent damage to the crop. If flowers abort, then no amount of rain after that period will make new beans, so we are talking about a hit to production on top of an already down year on Brazil's biennial production c

I have often remarked on the inverse correlation between price and #commodity inventory (stocks). In #coffeemarket the two most relevant stocks are the #GCA stocks (= USA unroasted #coffee) and the #certifiedstocks (tenderable to the exchange). As you can see from the graphic below, in some cases you can basically just invert the certified inventory to see a very basic price model (lower inventory = higher prices). However, while Certified stocks were rapidly increasing from