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Tis the Silly Season

We have now officially entered the #SillySeason as we prepare for potential #Frosts in #Brazil. According to my #Seasonality report, this is the most #bullish 6 weeks of the year for #Arabica#coffee. Robusta is slightly less bullish here according to the Seasonal (3rd most bullish week for #Robusta), but still quite bullish.


Worth noting a few things:

1) that there is no Frost in the forecast as of yet. Over the next two weeks both the US and Canadian models are not showing anything close to frost, so there are no specific risks yet.

2) Seasonals are a relatively weak forecasting tool. They are good to add to your repertoire, but generally not something that you want to trade off alone.

3) Coffee plantations have gradually moved North over the last generation to reduce the risk of frost to the crop. We do still see them every so often, but it is rare that they hit the main production areas in Brazil.

4) If they do hit then, watch out! Market is counting on a large 22/23 crop to offset the current deficit and if that crop is compromised then we will see some fireworks.


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