#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. In this short article, I explain how I look at coffee weather in general and how traders can interpret weather reports for coffee.
The fundamental framework for looking at coffee weather as a trader is essentially that we are anticipating changes to S&D, so first and foremost coffee weather analysis is focused on the areas with the highest concentrations of coffee. This means primarily two regions, #Brazil and #Vietnam. Other regions are important as well on a global scale #Colombia, #Indonesia, #Ethiopia, and #Central America to name a few, but when anticipating weather's price impact on the futures's market we will always be anticipating chang