There is a lot of information out there on the #coffee market and many people in the coffee industry and across the supply chain can find the reports and data confusing or overwhelming.
In this short guide, I’ve put together short summaries of 5 of the most essential reports for coffee people to understand, along with links to short articles that provide more depth on these key #coffeemarket reports and how to interpret them. I’ll also conclude with some thoughts on interpreting the data in aggregate and forecasting price.
The following 5 “Market Essentials Reports” included in a free subscription at the Coffee Trading Academy (sign up here) are discussed below:
A Seasonal Chart is any chart that overalys data over the same annual timeframe, but this article is primarily focused on “Price Seasonals”. Commodity prices tend to follow a distinct seasonal pattern, this article discusses why and how to read the report.
Main Article: Coffee Report Focus #1: Seasonals
The Commitment of Traders Report collates data published by the CFTC into easily understood charts and categories. This Report shows “who” is in the market and how big their positions are. Much of the focus is on the “Speculator” and we explain why this is such an essential part of understanding price action.
3. Open interest
Open Interest (OI) is the number of futures contracts that are currently “open” or active in the futures market. The Open Interest Report shows the daily open interest (both by cover month and in aggregate) for the coffee market. Understanding OI is important for those who trade futures and calendar spreads to understand liquidity, and it also provides some hints as to who is trading and why.
4. GCA Stocks
The Green Coffee Association, Inc (GCA) is the coffee trading association that covers much of the trade in the Western hemisphere. Their Inventory reports are published consistently every month and are considered the definitive volume of Green Coffee stored in the USA. Understanding GCA stocks is an essential part of understanding destination market supply.
5. Cert Stocks
The Intercontinental Exchange (ICE) publishes data daily on the total number of bags certified for delivery against futures as well as those pending certification. These stocks are the actual supply available to the futures market and understanding their make-up and mechanism is key to assessing the connection between the physical and the futures market.