Today #coffeefutures traded below 190c for the first time since July 2021. Despite #coffee prices hitting a high in the 260s back in Feb and then trading in the 200s for well over a year, looking at the chart it is quite clear that we are in a bear market and have been for at least 8 months. Despite the current bear market, #calendarspreads remain inverted, #certifiedinventory has made new lows and the most recent #Brazil crop was worse than many had expected. So what the h
#Coffee has confounded both bulls and bears with a sideways movement after one of the most dramatic bull markets in a generation. Since the initial rally 260c, certified inventory has fallen to 23-year lows and calendar spreads have inverted to levels not seen since the Brazil frosts of the 1990s. So where is coffee headed to from here? My view is that coffee probably has one more rally left in her, but then she is done, and the bear market will start. However, price predict
Recently a #coffee researcher friend of mine and I were discussing one of the key topics driving the #coffeemarket today: the disastrous #certifiedinventory and its dramatic impact on #calendarspreads. In this article, I will discuss the current "spreadpocalypse" the #inverted calendar #structure in the market, why I think we may be in the worst of it right now, and how I anticipate this to play out over the coming months. If you are less confident in your #commodity futures
One of the key components that I use, when trying to ascertain fair value of #coffeefutures is the #certifiedinventory, and the outlook is...not so good. We have been seeing one of the largest cert draws in the history of #coffee and we recently passed an important milestone the 1 million bag threshold. Coffee is now below the 1 million bag level for the second time in just a couple of months, and unfortunately this trend looks set to continue. In this article, I will show w
#Coffee prices have crossed the 200 day SMA 4 out of the last 5 trading sessions, and last week marks the first time that this key support has been breached since the start of the current bull-market in 2020. Whatever the future may bring, the frost rally did its job and rallied prices from the 140s to the 260s, but now it is time to declare the frost rally over and done with. The market now needs to look to the future, and our assessment of the future will determine where pr
#Weather is one of the key reasons that agricultural #commodities are volatile, and in #coffee this is particularly acute. It is often remarked that Coffee is the second most actively traded #commodity after #energy (it's not true, its a myth), but Coffee is extremely popular among #speculators. One reason that coffee is so keenly desired by speculators is that the #biology of the coffee plant and the chaotic nature of weather systems combine to make a volatile mix.
#Coffee is a rapidly changing market and while conviction is essential, we need to be prepared to change our view when the facts change. Below are 7 data points to watch out for in coffee, when these become available, we should be prepared to change our minds. 1) GCA Stocks These are due out on the 15th, expectations are for a healthy draw down. The draw is expected seasonally and also from the wide annual deficit and logistical problems in shipment. Deviating from this exp
#Weather is one of the inherent drivers in coffee market volatility and right now there are 3 developing stories that all #coffeetraders need to keep a sharp eye on. These are the persistent wetness in #Colombia, the wet harvest in #Vietnam and the sustaining of the wet season in #Brazil. In this article I will provide some background on evaluating weather in the #coffeemarket, outline what is happening in these three key origins and then make some #forecasts about what to ex
Ladies and gentlemen, the Coffee Trading Academy Podcast podcast is launched! Today we have a particularly timely episode with a focus on #CoffeeWeather (#Brazil and more). We kick off our first episode with a fantastic guest, the one and only David Streit, COO and founding member of #Commodity #Weather Group. David has been a commodity meteorologist for 40 years, in this wide ranging interview we cover the specifics of what's happening right now in the key coffee origins, b
Last month the #GCAstocks, shocked to the downside when they came in below expectations at 5.78 mm bags. This month, we have a substantial stock increase to 6.07 mm bags which essentially undoes the short term fear from last month's low number, but longer term only confirms the #deficit. In the paragraphs that follow, I outline this logic, explain how to read this report and why I believe it confirms the deficit. The #GCA #coffee stocks are published by the nonprofit Green
You can't be half-pregnant, but that is exactly how the #coffeemarket looks right now. The technicals are equal parts #bullish and #bearish. There is a strong uptrend but declining momentum. We have Bullish #triangle continuation and Bearish #doubletop forming. As is so often (frustratingly) the case in #TechnicalAnalysis, we need a #breakout confirmation to confirm the direction. This ambiguity confirms with the #Fundamentals at this point. There is a #bullish deficit th
"When all you have is a hammer, all of your problems look like nails." As a "coffee guy" or "coffee gal", it can be very easy to get stuck in our worlds and lose sight of the big picture. For those of us who are immersed in #coffee market data and talk about the #coffeemarket on a daily basis, we tend to see everything in terms of coffee. When you publicly share a view of the #market, it is even more tempting to look at every day's price action as confirmation of our view.