The current Z/H #calendarspread has been inverted for an entire year (November 2021) and today, it touched a low of -2.6c and is currently trading @ -1.8c. The collapse of the inversion has been swift and violent, but more significantly, it opens the door for the final phase of the current Bear market in #coffee. What Happened and Why it Matters #Arabica is a market that is notoriously difficult to invert, which makes the 1 year long inversion all the more remarkable. However

Understanding the #SupplyandDemand (S&D) balance sheet is essential for any professional #trader, but can also be extremely daunting. For many #coffee and #commodity #traders and #analysts, we have a deep insecurity in our relationship to the fundamentals because of its complexity and the extent of the many unknowns. Despite (or perhaps because of) the difficulty of mastering the #SnD, it is a prized skill in our profession and a key driver to price discovery in the #coffeem

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

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

The #coffeemarket is in a very different dynamic than it was 3 months ago, and we are getting near to a new paradigm: the bear market. In this article I will outline some of the warning signs that we are entering a bear market in #coffee and highlight some key data points to watch. I’ll also highlight 2 key areas that can change the #coffeefuturesmarket and return coffee to new highs. Still Some Life in this old Bull While it is time to look out for the bear market, we canno

It is a well-worn cliché to those of us in the #coffeeindustry to compare coffees to wines but it helps us convey to the lay-person the variety and depth of the #coffeemarket rather succinctly. Much like in the analogy of wine, the array of origins, qualities and preparations in #coffee not only creates a variety of flavor profiles but also a variety of pricing and availability. The global coffee market captures this variability in pricing using a method shared with many oth

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