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Coffee Trading Academy Blog

What the Latest Inflation Number Means for Coffee (and all Commodity) Prices

Aug 11, 2022
3 min

What the Latest Inflation Number Means for Coffee (and all Commodity) Prices

The overall framework in commodities is that a weak USD rallies commodities and a strong US dollar devalues commodities. This is the basic influence that we in commodities need to understand, and we just recently had a bullish commodity event: the US inflation number. US inflation came in lower than expected and this was interpreted as being bearish the USD which is bullish for coffee and all commodities. In the paragraphs below, I explain why this is bullish for #coffee an

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Ryan Delany

Aug 9, 2022
6 min

Lay of the Land

#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

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Russo-Ukraine Conflict and the Impact on Coffee (and Commodity) Markets

Ryan Delany

Feb 24, 2022
5 min

Russo-Ukraine Conflict and the Impact on Coffee (and Commodity) Markets

#Russia has begun aerial bombardment of #Ukraine, including in the capital city of Kiev this morning. What many had hoped (including me) would be a limited and bloodless territorial dispute is now looking like full-scale #war. As a military veteran of two wars, I do not speak lightly of the conflict, it will be devastating to those directly, and likely to seriously alter the global security dynamic that has existed since the end of WW2. However, my role is to offer insight

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Understanding the US Dollar Impact on the Coffee Market - Part 1

Ryan Delany

Feb 18, 2022
7 min

Understanding the US Dollar Impact on the Coffee Market - Part 1

#Coffee is both a financial product and a global #commodity. It is cultivated, consumed, shipped and traded across almost every country across the globe. Due to its global nature, the US #dollar performs an outsized role as a common #currency in the #trade of this product. Notably, the two primary #coffeefutures #markets (ICE Eur and ICE US), are priced in #USD. This makes understanding the purchasing power of the US dollar foundational to understanding the price of coffee.

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OMG, Omicron! and the Effects on the Coffee Market

Ryan Delany

Nov 30, 2021
4 min

OMG, Omicron! and the Effects on the Coffee Market

Today Fed Chairman Powell gave testimony before the US Senate where he cautioned on the economic impact of the #Omicron Variant on the US economy. This follows on the heels of the World Health Organization’s announcement on Friday that the new variant was a “cause for concern”. In this article, we discuss what the omicron variant is and what we can expect the impact to be on the macroeconomic environment and the coffee market. Background The omicron variant of the novel #co

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Ryan Delany

Nov 11, 2021
3 min

7 Data Points to Watch in Coffee

#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

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What to Expect When Your Expecting (a Fed Press Release) *Coffee Market Edition*

Ryan Delany

Sep 22, 2021
3 min

What to Expect When Your Expecting (a Fed Press Release) *Coffee Market Edition*

In just a few short hours, the #FOMC (230pm EST) will be making a statement and the markets will be reacting. For people in the #coffee industry (and #commodities), what you need to know is that the overt expectation is for a #bullish #dollar which is #bearish #coffeefutures and commodities. However, that expectation may be subverted. I go over how that can happen below. The overt expectation is bullish the USD and bearish for coffee and commodities The basic relationship

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The Struggle for $2 Coffee, Comparison with 2014

Ryan Delany

Sep 2, 2021
3 min

The Struggle for $2 Coffee, Comparison with 2014

4 days in a row now #CoffeeMarket has tried and failed to break the psychologically significant 200 level. Back in 2014 #coffeefutures crossed $2 dozens of times before finally collapsing and ushering in a 1 year bear market which despite a reprieve in 2016 then continued into 2019. As a twitter friend said "No two patterns are alike, but they're unfolding very similar[ly]." Let's be real: with the worst #frost in a generation, a #drought, and dry forecast for next 4 weeks,

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Ryan Delany

Jul 13, 2021
2 min

The Pied Piper of Coffee

Back in October 2020, the Pied Piper of the Brazil drought led away all of the bearish Rats from the #CoffeeMarket, and now he has returned to collect payment. Either the market has to deliver some bullish data from the current crop or all of our new-found bullish speculator friends are going to disappear with the Piper. For months we have been hearing about the drought in Brazil causing a massive shortage of coffee and indeed the market has rallied from 105c back in Novembe

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Ryan Delany

Jul 8, 2021
3 min

FOMC Might be Bullish Coffee

I read the Federal Reserve minutes so you don't have to! Steady as she goes from the #FederalReserve. This may disappoint #USD bulls who were expecting some fireworks or change in policy. As those of us who follow coffee know, a bullish USD is bearish commodities and so the recent rally in the #Dollar has weighed on #coffee prices. If that bullishness was misguided then we could see #commodities and the #coffeemarket pick back up. The core themes of the report were that #i

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The Doomsday and Mini-Doomsday Inflation Scenarios

Ryan Delany

Jun 20, 2021
3 min

The Doomsday and Mini-Doomsday Inflation Scenarios

The #FederalReserve's #FOMC met this past week, and the results are relevant to us in the #coffeemarket, and indeed all of the #commodities. There were two big takeaways from the communications last week that were somewhat contrary, but the market interpreted them as #bullish the #USdollar. I think that bullishness may be unwarranted in a small way (the mini-doomsday scenario) and also I want to highlight what the Big Risks are here (the doomsday scenario). First, I'll recou

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Ryan Delany

Jun 10, 2021
2 min

The Truth about Inflation and Coffee

The #CPI numbers came out and they were high, even higher than expected. The numbers for May were an increase of 0.6% which was 50% higher than the expectation of 0.4%. Why should we in the #coffee world care? Inflation is intimately linked with #commodity prices. As I teach in my course, when #inflation rises, commodity prices rise, and that includes coffee. Consumer Price Index (CPI) So is this latest CPI number really a concern? #Forbes warned us yesterday to get ready

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Ryan Delany

Jun 1, 2021
2 min

Are Rate Hikes Coming? Does it Matter?

#Currencies and #FX are notoriously difficult to predict because they do not exist in a vacuum, one #currency affects all others. That said, I'm cautious that #interestrate hikes are coming and that this will put some #bearish pressure on the #commodity #markets. As a #coffeemarket analyst, there's three factors here we need to consider: 1) will the #federalreserve raise interest rates? 2) will that appreciate the #USDollar? 3) will this put #bearish pressure on #commodities

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Ryan Delany

May 24, 2021
1 min

#Inflation Trade Overdone?

Given the outsized influence of the #macro bullishness on the #coffeemarket, it is important to revisit this topic. What's concerning to me here is that the #USdollar has continued to weaken, but many of the #commodities have come off quite a bit. Some of this is due to #bearish fundamental news (rains in #wheat for example), but given the synchronized move into a macro #bullish stance, I'm very cautious of a synchronized unwind. In particular, it seems clear to me that the #

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Ryan Delany

May 18, 2021
1 min

Don't Fight the Fed

Well the Macro picture has once again raised its ugly head. #Federalreserve Vice Chair Clarida said the weak April payroll report shows "we have not made substantial further progress" on the Fed's goals for employment. This was not unexpected, many pundits had said as much given the data (and our poll suggested the same), but putting voice to the sentiment moved the #currencymarkets. Overnight, #FX traders sold off the dollar and this morning #Coffeetraders decided to have

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Coffee Market Essentials package and discounts on training (see more options).