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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 predictions are a bit misleading. Predicting commodity markets with certainty is foolish, markets are complex and there are multiple potential outcomes. Instead, a good analyst discusses probabilities.

In this article, I will discuss describe the lay of the land, how we found ourselves where we are, and also share why I believe that the likely outcome is a rally