Coffee November 6, 2019
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Started by metmike - Nov. 5, 2019, 8:57 p.m.


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:


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By metmike - Nov. 5, 2019, 9:31 p.m.
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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


                   



2 Year below

                

                   


 Coffee 10 years below-we broke 10 year lows recently

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.

                                    


By metmike - Nov. 5, 2019, 9:44 p.m.
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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. 



By metmike - Nov. 5, 2019, 9:46 p.m.
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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. 

Climate in Ipatinga (Minas Gerais)

https://en.wikipedia.org/wiki/Ipatinga

Average monthly precipitation over the year (rainfall, snow)

                    

                        This is the mean monthly precipitation, including rain, snow, hail etc.                                                    Show in Inches »                                            

                                                                                        Average precipitation (rain/snow) in Gobernador Vala, Brazil   Copyright © 2019 www.weather-and-climate.com                                                

             https://en.wikipedia.org/wiki/Ipatinga

Population (2015)
Area
Government
MinasGerais Municip Ipatinga.svg
Country Brazil
RegionSoutheast
StateBandeira de Minas Gerais.svgMinas Gerais
FoundedApril 29, 1964
 • MayorNardyello Rocha (MDB)
 • Total165.509 km2 (63.903 sq mi)
 • Total257.315
 • Density1.440/km2 (3.73/sq mi)
Time zoneUTC-3
Postal Code35160-000
HDI (2000)0,806  – high
Websitehttp://www.ipatinga.mg.gov.br/

  

By metmike - Nov. 5, 2019, 9:47 p.m.
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Latest 2 week forecast from the US operational model.


http://wxmaps.org/outlooks.php

http://wxmaps.org/pix/prec8.png

                                    

By metmike - Nov. 5, 2019, 9:48 p.m.
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Note the huge increase in soil moisture on the maps below.

By metmike - Nov. 5, 2019, 9:51 p.m.
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The heat will be in far northern coffee country and also some in western parts of the Argentina growing region. 



                                    


By metmike - Nov. 5, 2019, 9:51 p.m.
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By metmike - Nov. 5, 2019, 9:52 p.m.
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By metmike - Nov. 11, 2019, 8 p.m.
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Coffee price was crushed today. 

Big rains on the way on the US model.

European model has around average rain.

By metmike - Nov. 13, 2019, 2:20 p.m.
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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.

By tjc - Nov. 13, 2019, 7:12 p.m.
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Looks like buy a dip!!

By metmike - Nov. 13, 2019, 7:52 p.m.
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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.

By metmike - Nov. 18, 2019, 1:26 p.m.
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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.

By metmike - Nov. 19, 2019, 9:16 p.m.
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Beneficial rains in the forecast for Minas Gerais continue to be a bearish element for that market.