This is where they grow coffee in Brazil. The state of Minas Gerais is numero uno!
The higher the number, the greater the production.
This link has more good stuff including a map that I can't copy here:
November 5, 2019 update: Coffee price charts. This is the December contract. Note the potential double bottom(May lows-August lows) and big spike higher in price. Then we had a big rain event which has resulted in a nice, first flowering(very early in the rainy season/bearish). This was followed by couple more rain events that were disappointing/less than predicted, with several places in coffee land on the dry side.
This has us testing the September highs........even with increasing rains in the forecast which is bearish. However, you will note on the next page, that coffee has strong/positive seasonals from now until the rest of the year...... even in many years with bearish weather.
1 Year Below
Drought in Brazil in 2014 caused a spike
Drought in Brazil and bad weather globally in 2010 caused the 2011 spike
Coffee prices dipped below 50c in late 2001 and the first half of 2002 before the time frame above.
Markets don't always follow seasonality but this is just a historical tendency.
Coffee often drops lower with heavy supply pressure during harvest June-August.
Shortly after that is often a good time frame for a bottom, followed by price strength. The seasonal/historical tendency below looks pretty powerful based on the average of a 20 year time frame, ending in 2017.
October is the start of the rainy season in Minas Gerais, #1 producing state in Brazil for coffee production. Should those rains sputter with a dry pattern and/or blocking high pressure ridge, it would turn the weather bullish and be a high confidence long/buying because of adversity to the coffee plants.
However, we have a lot of rain in the forecast right now, which makes the weather forecast bearish.
We've had some early rainy season events that have already triggered decent early flowering in coffee land.
With more rains, especially in the southern half of coffee land, we could have a set back from this area of resistance but weather may not be the main driver of prices here.
It almost never rains in coffee land in June/July/August and widespread rains in September are a bit unusual. This is completely normal weather for their "monsoon".
The rainy season starts in October, which triggers the initial flowering(s). This happened in 2019.
The months when they get blockbuster rains are Nov/Dec/Jan. If rains would not come for several weeks during those months, the weather would be interpreted as bullish. Rains taper off after that, then they have the dry season again May-September.
This is the mean monthly precipitation, including rain, snow, hail etc. Show in Inches »
|Founded||April 29, 1964|
|• Mayor||Nardyello Rocha (MDB)|
|• Total||165.509 km2 (63.903 sq mi)|
|• Density||1.440/km2 (3.73/sq mi)|
|HDI (2000)||0,806 – high|
Latest 2 week forecast from the US operational model.
Note the huge increase in soil moisture on the maps below.
The heat will be in far northern coffee country and also some in western parts of the Argentina growing region.
Monitoring rain/satellite pictures:
Rain amounts 24 hours:
Rain amounts for longer periods globally:
Coffee price was crushed today.
Big rains on the way on the US model.
European model has around average rain.
Still a big difference in rain amounts with models.
US model has the most, European model ensembles the least, with a bit below average rains. The last run of the US ensemble was a bit drier.
Looks like buy a dip!!
Not sure. The forecast is close to average rains..........less than that on the European model which is a bit bullish.
However, there is no blocking upper level dome that normally shuts down rains in the warm season and temperatures will not be that hot.
We've opened up the new week with very bearish coffee weather forecasts.
Tons of rain in week 1 and week 2 for #1 producing coffee state of Minas Gerais, Brazil.\
Of course coffee does not need to trade just weather when the weather is great.
Other factors are more important right now.
Beneficial rains in the forecast for Minas Gerais continue to be a bearish element for that market.
Coffee has rallied 20c since the lows in August and 10c over the last week. It's not because of drought, which is the main reason that weather can affect coffee prices in November.
Too much rain could be a bullish element in the forecast but certainly not lack of it in the forecast.
Seasonals are very strong for prices at this time of year, along with funds having massive shorts that they were covering that amplified this move up.........and prices being very cheap going into this historically strong time frame for prices.
There are certainly other factors that i don't know about.
The forecast continues to feature very heavy rains in Coffee-land. Too much rain.
Up to a foot of rain in the next 2 weeks.
Ideally, something like 2-5 inches would fall in a similar period and be considered beneficial. Less than an inch would be bullish.
Double that, even triple, like whats coming up is also bullish.