Is coffee making a triple top or does it break higher?
Mike is it to dry in eastern Brazil?
Hi cutworm!
as soon as I get back home, we’ll find out!
great trading post!
Some extremely high prices for coffee. I'll do some research to report more.
https://tradingeconomics.com/commodity/coffee
1. 10 years:steepening uptrend. Record high prices early this year.
2. 1 year: Top in Feb 2025. Lower high April 2025. Low in July put in after Trump announced a 50% tariff on Brazil coffee. Is this a flag pattern?? Breaking out to the upside above the downtrend? Still well below the highs from earlier this year.
3. 1 month
4. 1 week
++++++++++++++++++++++++++
The source above no longer allows us to go out beyond 10 years for free.
This was a 50 year price chart from this past January, before they changed those terms:
Coffee all time highs! 1-31-25
https://www.marketforum.com/forum/topic/109764/
Coffee has taken off like a rocket!!! WOW!!!
President Trump broke from his tariff letter format to tell the president of Brazil that he plans to put a 50% tariff on "any and all Brazilian products sent into the United States" starting on Aug. 1.
Trump posted the letter to social media Wednesday afternoon, his 22nd such letter this week. However, this letter departed markedly from the others Trump has posted. All of the other letters were similar, telling countries that the new tariffs were intended to rectify trade imbalances with the U.S.
The letter to Brazil, however, was about Brazilian politics. Trump wrote that the Brazilian tariffs are needed in part "to rectify the grave injustices of the current regime," and in particular what Trump called a "Witch Hunt" against former Brazilian President Jair Bolsonaro.
Trump has long praised Bolsonaro, and he continued to do so in his letter.
Trump wrote that he "knew and dealt with former President Jair Bolsonaro, and respected him greatly," and said the way the former leader has been treated in Brazil "is an international disgrace."
+++++++++++++++
The insanity of this is off the charts.
Trump is literally punishing US companies that buy coffee because THEY are the ones that pay the tariff.
US companies pass along their higher cost to US consumer so Trump's pathological thinking, that he is punishing the country of Brazil for not treating his far right friend well is, in reality punishing US companies and consumers that use coffee.
We don't grow coffee in the US because we don't have the climate to grow coffee, so this isn't going to cause coffee growers/production in Brazil to move to the United States.
It's just flat out violating Trump's own justification for imposing tariffs, which is already based on his complete lack of understanding of the principles of beneficial free trading between countries with different economies.
This is where they grow coffee:
https://ipad.fas.usda.gov/rssiws/al/crop_production_maps/Brazil/Municipality/Brazil_Total_Coffee.png
Minas Gerais weather counts the most!
++++++++++++++++++++++++++
https://ourworldindata.org/grapher/coffee-production-by-region
The tropical areas that grow coffee in Brazil have seasonal monsoon climates/weather.
During this time of year at the end of their dry season(the end of their Winter) they've not received much rain since April.
Their wet season usually starts in October then really picks up in November. December/January are the wettest months, with nearly 12 inches/month!!! Then rains taper off in February and March.
https://en.climate-data.org/south-america/brazil/minas-gerais/uberaba-2878/#climate-graph
https://en.climate-data.org/south-america/brazil/minas-gerais-203/r/february-2/#monthly-weather-data
https://charts.equityclock.com/coffee-futures-kc-seasonal-chart
https://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.30day.figb.gif
30 day rains: There is usually no rain in coffee-land
90 day rains" Usually dry in coffee-land
https://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.90day.figb.gif
180 day rains Mostly dry thru that period but it was drier than average there earlier this year.
https://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.180day.figb.gif
Brazil's coffee crop faces severe drought impact
Summarized by AI from the post below
FacebookFacebookFacebookFacebookFacebookFacebookFacebookFacebookFacebookFacebookFacebook
2 week total rains from the 18z GEFS run below"
2
2 week rain anomalies from the last 12z European Ensemble model.
The rainy season doesn't usually kick off until October!
46 day anomaly from the EE model:
++++++++++++++++++=
Here's a map of where coffee is grown to compare the forecast with. It's still September and the rainy season/monsoon is not expected to start for another month+ or so:
Without massive amounts of fossil fuel manufactured synthetic fertilizer, crop yields and world food production would drop close to 50%!
Anothersecret about fossil fuels: Haber Bosch process-fertilizers feeding the planet using natural gas-doubling food production/crop yields. September 2019
https://www.marketforum.com/forum/topic/39215/
++++++++++++++++
https://www.helenacoffee.vn/farming-10-nutrition-fertilizer-for-coffee-plants/
https://www.sciencedirect.com/science/article/abs/pii/S0304423823005393
https://coffeebi.com/2025/09/07/coffee-market-update-and-innovations-shape-industry-on-sept-7-2025/
+++++++++++
https://ico.org/specialized-reports/
As at 3 September 2025
++++++++++++++++++++++
https://www.precedenceresearch.com/coffee-market
https://www.cnbc.com/2025/08/13/coffee-and-tea-prices-ramp-up-due-to-tariffs.html
2 week rain anomalies in Brazil from the last 12z European Ensemble model. Signs of the first rain at bit early?
This was the 46 day rainfall anomaly forecast. 
++++++++++
Here's what I think with regards to the weather there.
1. Ahead of widespread huge rain events, that will trigger early flowering, KC could see some heavy selling pressure. Ahead of big rain events, until the crop has flowered and the cherries set. There needs to be a couple of follow up rains after flowering to avoid the flowers being aborted.
2. Typically there is a sell the rumor, buy the fact bounce up AFTER the rains fall. If they are disappointing and there is no additional rains for awhile.......we can rally pretty hard.
3. If the forecast during this key developmental period in Oct-Dec features a long DRY period with no rain in the forecast, the market will consider it very bullish with reductions in the crop size/supply dropping if it gets bad enough.
4. See the actual crop area below to compare the rain forecasts to.
5. Seasonals are actually lower in Sept/Oct. Maybe from the rainy season beginning successfully and causing the selling mentioned above. November is a strong month historically for coffee prices. However, we are near record high pricing right now and extremely volatile. The usual factors that dominate coffee trade are way out of whack when prices are at historical highs.............so historical seasonals are not as reliable.
The overnight EE model rain anomaly for 2 weeks was drier but i seriously doubt that this is a big deal since the rainy season doesn't usually start until October in Coffeeland.
Its impossible to say when the market will start trading 2 week rain forecasts for Brazil coffee as a top price influencing factor. I will guess that it will be earlier than usual because of recent drought and near record high prices.
I should mention that Trump's political 50% tariff on Brazil coffee to punish Brazil for not treating his far right friend right (making the price of coffee for US consumers MUCH more expensive if its not lifted) is a looming risk to traders that might have the wrong position if news comes out from Trump, which is typical of his tariffs...... that he suddenly is changing the terms of this particular tariff.
With that being the case, I would have tight stops in or limit to small positions if you want to minimize your exposure to this elevated risk. Just know its for real! You can be dead right about everything, including all the fundamentals and weather but get your clock cleaned because of an unpredictable, impulsive Trump tariff announcement/decision.
Excellent posts, MetMike. Tremendous overview and current update.
Since I am long a put that expires tomorrow, I can personally GUARANTEE there will be no significant drop in futures to at least the open early Monday morning!
The path of least resistance is down, but coffee has yet to make the "BAD TRADE" and break down through support.
I will review my charts this weekend (do it every weekend) and decide if a short/put is warranted. Premiums are HIGH and will be especially so as the front option will have a month of time!
Trade well
Thanks much, tjc!
always great to get excellent thoughts from,our most active trader.
i forgot to post my agronomy articles that explain the flowering and cherry setting process for coffee, which requires timely rains and will add that when back on the computer, later today.
++++++++++++++++++=
https://perfectdailygrind.com/2021/08/why-do-coffee-plants-flower-what-does-it-mean-for-producers/
by Atlantica Coffee | Nov 29, 2023 | Coffee, Sustainability
https://www.atlanticacoffee.com/en/the-brazilian-coffee-cycle-from-flowering-to-harvesting/
https://www.youtube.com/watch?v=-CdScpRVYjI
December arabica coffee (KCZ25) today is up +9.65 (+2.58%), and November ICE robusta coffee (RMX25) is up +119 (+2.76%).
Coffee prices are sharply higher today, with arabica posting a 1-week high. Excessive dryness in Brazil's coffee-growing regions has sparked crop concerns ahead of the critical flowering period for coffee trees and is boosting coffee prices. Somar Meteorologia reported today that Brazil's largest arabica coffee-growing area, Minas Gerais, received no rain during the week ended September 6.
https://www.nasdaq.com/articles/brazil-dryness-ahead-flowering-period-boosts-coffee-prices
++++++++++++
This source has no idea what they are talking about. It usually doesn't rain in coffee land in early September!!! This is normal weather.
Almost no rain in J-J-A into the first half of September. Then rains SOMETIMES picks up in late September but usually not until October. Even then, the October rain is still less than 50% of the rain of Dec-Jan.
If the forecast is still dry and its a month from now, THEN the coffee market will get bullish over it.
Also, rains this early in the year will often trigger flowering thats TOO EARLY. Initial rains that cause flowering MUST BE accompanied by follow up rains within a couple of weeks or else the flowers will abort. Aborted flowers zap energy from the coffee plants.
After flowers abort, the plant has to start over with less energy. Coffee plants will get numerous times to flower and add to flowers in Oct-Nov. Flowering in Sept is early but ok if rains don't stop for a couple of weeks. Flowering Dec is late.
What will happen if you have several partial flowerings spaced out numerous weeks apart, the harvest is a nightmare.
They want to pick the cherries just as they get ripe. Not before not too long after. There will always be cherries at different levels of maturity but the more spaced out the flowering, the more times pickers have to harvest the ripe cherries.
+++++++++++++++++++++++++++++++++++++++
https://www.worlddata.info/america/brazil/climate-minas-gerais.php
thanks for the great info Mike.
It looks like a cup with handle has formed. 400 is strong resistance, triple top. If it breaks should be a good move? JMHO
YW, cutworm!
Thank YOU for pointing this out. I hadn't been watching the coffee market for many months and since it's a bit early for their rainy season, overlooked following it until you brought it up.
I'll try to post updated rain forecasts for Brazil coffee when possible but might not be able to stay on top of it, unless it turns into a huge weather market thats tradable. I don't like waking up at 3:15 am to trade it so that might now happen.
Coffee just spiked 5c higher during this post. WHAT HAPPENED?
This spike higher seems tied to news. Not likely weather because the last 6z GEFS that just came out was WETTER for coffee land. It possible that a too early rain is bullish. As mentioned yesterday, if we have the first flowering in September, the risk of it being aborted is pretty high because the rainy season usually hasn't kicked in yet and the flowering needs additional rains within around 2 weeks or it will be aborted before turning to cherries.
If I had try to trade the increase in rains on this last model, it would have been a short and I would have just got my butt whipped!
1. Just out 6z GEFS-wetter for coffee-land. These are rain anomalies/departures.
2. Previous 0z GEFS-6 hours earlier
3. Coffee-land map
Coffee is soaring higher. The reason given is Trumps 50% tariff on Brazil, which is hitting US coffee drinkers hard as supplies in the US dry up and prices soar higher.
Ill try to look closer at the weather picture when back in my,office later today.
Some sort of news hit the coffee market on Friday at 7am. This triggered massive buying and sellers withdrawing.
https://tradingeconomics.com/commodity/coffee
1. 1 week with 7am Friday noted by the red line
2. 1 year. Upside break out to new highs seems inevitable!
+++++++++==
This doesn't appear to be tied to weather with the 2 week rain anomalies below showing enough rain to trigger very early flowering. However, flowering TOO early and no follow up rains is BAD because the flowers will be aborted before turning in to cherries after being pollinated. This will use up energy and potentially reduce yields when viable flowering occurs after the rainy season is in full swing. Coffee plants will have several flowerings with early rainy season events.
So here's the deal too. Extremely early flowering that remains viable will result in very early maturing cherries, while later flowering will mature later. This makes harvesting a nightmare because the coffee cherries need to be harvested within a narrow time frame after maturing. Growers of corn and beans have all the planet mature at the same time and, especially with corn, can leave the plants in the field for many weeks(to dry down for instance) then harvest the entire crop at the same time.
NOT SO for coffee, especially when earliest viable flowering and latest viable flowering are many weeks apart.
Individuals need to pick off ripe cherries and leave immature cherries on the plant. Mechanized harvesting is mostly used on the big farms but they will collect over and under ripe cherries that need to be removed manually. I would guess that crops that mature over a very long period have more harvesting losses than those that mature more simultaneously.
Here's more:
https://perfectdailygrind.com/2023/11/coffee-cherry-sorting/
https://perfectdailygrind.com/2017/07/hand-picked-vs-mechanized-coffee-harvesting/
46 day rain anomaly from the last European Ensemble model. Average to slightly above average rain in coffee country.
Coffee reversing lower today. Red line was the open at 3:15am.
Coffee closes at 12:30pm(CDT).
https://tradingeconomics.com/commodity/coffee
1. 1 week:Open red line, tested Mondays highs then reversed lower
2. 1 year: Just shy of the top earlier this year
LOOKS like I needed 3 more trading days!! Sad
Thanks, tjc,
Yesterdays powerful downside reversal lower was reinforced with a huge gap lower on the open early this morning and a sharply lower close.
ill have the chart when back in the office. I’d been stating days ago that the weather forecast has good rain in it for coffee land so reports that the spike up on Fri/Mon was from dry weather were wrong.
Apparently, it took the market a couple of trading days to react to the wettish weather forecast?? Or else it was trading something else. Volatility at tops can lead to huge over reactions and unpredictability, especially in this case with historically high prices.
When theres a severe shortage or extremely low stocks, there is not much margin or supply cushion. Even small cuts to already low stocks or small adjustments to crop size or weather forecast can be greatly amplified. That can go both ways with small increases/bearish news.
The reversal lower we covered above, continued this week!
https://www.bbb.org/file-a-complaint/search
1. 1 week
2. 1 month
3. 1 year
4. 10 years
2 week rain anomalies from the last 0z European Ensemble model:
CORRECTION ON RAIN MAPS BELOW. THEY ARE ANOMALIES OR DEPARTURES FROM AVERAGE!
Coffee has had some extra strength recently. We are near the highs:
https://tradingeconomics.com/commodity/coffee
There is no rain in the forecast for the next 8 days. European Ensemble model below:
However, after that the European Ensemble model has the monsoon/rainy season kicking in with gusto.
These are total rains the next 46 days:
Coffee had a gap higher open early this morning that was never completely filled. That gap was significant because it was above some previous highs this year that served as resistance. It tried to fill the gap but couldn't as that resistance is now SUPPORT. We closed near the highs.
There is some tariffs stuff going on here impacting the trade that makes it extraordinarily risky to trade just weather.
I am tempted to trade this market right now but really hate waking up before 3:15 am CDT to do it when trading is typical. Regardless, if trading it, I would put in protective stops for sure because you could nail everything about a trade and have a nice profit going...........then Trump make an impulsive tweet and suddenly have a loss.
However, that does NOT protect you when the market is closed, which is for 15 hours or the day. If Trump makes a tweet then and you have a position on, when coffee opens at 3:15 am, you will either be celebrating your great luck or regretting holding the position overnight!
Weekends are worse.
tjc likes to buy options but the premium you will pay when prices are at a record is record high. To make money on coffee options you usually need to be REALLY right to offset the extra money you pay to hold them. With futures, if you are right by a few ticks you make money after paying commissions.
Dry weather for the next week in the forecast continues to be bullish for Brazil's coffee land. However, the rainy season should kick in after that in time to trigger good flowering needed to start the production of the new crop in timely and potentially robust fashion.
https://tradingeconomics.com/commodity/coffee
1. 1 week; Note the gap higher, partially filled but still open!
2. 1 year: Note the close above previous highs/resistance and only the record highs from earlier this year above it.
I spend a bit more time on the coffee analysis since yesterday and have a better understanding.
1. The forecasts this week HAVE BEEN getting drier for coffeeland in Brazil. It been pretty dry there this month, with a delay of the rainy season. Models start the rainy season with gusto IN WEEK 2. However, over the weekend that starting time frame was delayed and Wednesday it was also delayed by a couple of days, which very likely led to gaps higher.
Looking at the price charts below, we had 2 separate daily gaps. 1 on Mondays's open and the other on Wednesday's open. I drew long red lines to show the daily high from the previous day and the gap higher open on those 2 days. Neither of those gaps have been filled which is obviously mega-bullish.
I also have the Tue and Thu opens in the tiny red line thats hard to see which were NOT gaps.
After we opened around yesterday's high today(not quite a gap), we had a HUGE spike higher but that was rejected as it was approaching the all time high from earlier this year. We are still up 3c at the moment but could be working on a reversal down today. If rains get closer, this could be the top(double top this week with early year highs).
1. 1 week
2. 1 year
https://tradingeconomics.com/commodity/coffee
Holy Cow! Minutes after that post, we did in fact have the reversal down. This also completely filled the Wednesday gap higher which makes it an EXHAUSTION GAP (or gap and crap on a short time frame).
The red lines below define that gap. We are below it now.
I'm guessing that the weather forecasts have moved the rains closer! Or else Trump made another random/impulsive tariff change. Or this market completely ran out of buyers near the record highs(exhaustion gaps show that) and it collapsed lower to find/uncover the fresh buying volume needed to match sellers.
https://tradingeconomics.com/commodity/coffee
+++++++++++++
I just looked at the last run of the 6z GEFS. It came out a couple of hours after the open this morning and was drier(held the rains off for another day+). This likely caused the spike higher, seen above which is when the market exhausted all the buyers who were buying on weather.
It would be different if there was NO RAIN coming. All the models have huge rains kicking in during week 2 which would be in time to make a big crop if the weather continued favorable for the rest of the upcoming coffee producing season.
This would have made it almost impossible to pick/sell the top as a weather trader. Buying on the way up with drier weather would have made big bucks but at some point, (this morning) that buying was exhausted and when that happens...........the market collapses. It would be impossible to know exactly when the buying exhaustion would happen in this situation because it happened BEFORE the rains increased/got closer.
So a weather trader would have had to SELL when the weather was still getting more bullish. A market that can't react positively anymore to added bullish ammo is toast.
Again, there is huge rain still coming in week 2, just delayed. It’s weather, however! Week 2 forecasts change a lot. If week 2 were to turn drier, coffee can come roaring back to make new all time highs! Rains in November are critical to trigger flowering now that the start of the rainy season is delayed.
++++++
At the link above, I just read their explanation for the price being higher today. It’s the severe drought in Brazil being caused by climate change.
That is the complete opposite of the truth!! Climate change is NOT increasing global drought and it’s massively greening up the planet and increasing crop production, while also making crops more water efficient.
Sad how they’ve hijacked that field and indoctrinated,people with fake climate crisis religion. When back in the office, I’ll pass on the thread to Larry, earlier this month that indisputable proves those words with the authentic science.
+++++
If I remember right, the value of coffee is $375\cent, so the drop of over 20c from the highs was over $7,500/contract.
I imagine the margins must be huge right now! This was also,why I advised extremely tight stops yesterday.
Buying the open today, a couple hours later would have had you celebrating over being so smart with a huge, quick profit on paper.
Suddenly, a few hours after that you would deep in a loss hole.
Easy to say after the fact but a trailing stop, being constantly adjusted upwards to protect,profits was the way to,go,for day traders that bought the open this morning.
That doesn’t always work. It can stop you out with a tiny profit or even loss and cause you to miss a huge move up too. However, near an all time high, the downside risks are extremely magnified.
https://tradingeconomics.com/commodity/coffee
++++++++++++
The truth about climate change and the POSITIVE impact on crops, especially coffee:
CC: Need links showing it leads to larger crops
25 responses |
Started by WxFollower - Oct. 4, 2025, 9:13 a.m.
https://www.marketforum.com/forum/topic/115068/
+++++++++++++++++
Related to coffee:
https://www.co2science.org/data/plant_growth/dry/dry_subject.php
https://www.co2science.org/data/plant_growth/dry/dry_subject_c.php
https://www.co2science.org/data/plant_growth/dry/c/coffeaar.php
https://www.co2science.org/data/plant_growth/dry/c/coffeaa.php
+++++++++++++++
This was today's trading session:
The open was close to UNCH from the Wednesday close, denoted by the little red line on the left.
We jumped to a spike high at 7:10am, pulled back a bit, then another higher high at 8:15am then ran out of buyers and closed on the low, almost 27c lower than the spike high.
27c X $375 = $10,125. That's one of the biggest 1 day ranges in coffee history!
It looks like there is no daily trading limit for coffee and the margin to have 1 contract is almost $13,000!
These were the total rain amounts for the last 4 runs of the GEFS thru 360 hours. ALL the rains are in week 2. There is no rain the next week.
1. 18z Wednesday evening done around 7pm
2. 0z Thursday, around 1am-added rain
3. 6z Thursday done around 7am-took away a bit of rain
4. 12z Thursday, done around 1pm-added rain. The red dot is 6 inches of rain!!!
Future model runs should consistently feature adding rains because each forecast drops off a dry period at the start of the forecast and add a new wet period at the end of the forecast. In other words, moving forward, the forecasts should be increasingly bearish.
