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Why Coffee Certs are Different Now, and NOT Bearish

One of the most important data points to follow in the #coffeemarket is the certified stocks. Every day, I send out my #Coffee #CertifiedStock reports to my subscribers (available for free here) and the reason that I do so is because this report is one of the most useful ways to estimate #fairvalue of #coffeefutures that we have.


However, this relationship has changed dramatically in the last year and I want to show how we need to adjust our thinking on this report.


Over the next few paragraphs, I'm going to discuss what the historical relationship is with this data, and how we need to adjust our thinking, and what it potentially means now.


The Key Relationship Between Stocks and Price:

It is one of the foundational principles in #economics that price is a method of regulating scarcity. If #supply are plentiful and #demand is low then price is low. If stocks (supply) are scarce and demand is high then price is high. Since coffee h