Coffee
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Started by rockitck - July 22, 2020, 8:48 p.m.

Up huge today +6.00. Is that $6.00 per bushel? 

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Re: Coffee
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By bowyer - July 22, 2020, 9:29 p.m.
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I think that is for a venti coffee at Starbucks :)

Re: Coffee
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By metmike - July 22, 2020, 9:38 p.m.
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Thanks for bringing that to our attention. That's a huge move = 6 X $375/contract = $2,250/contract

This is a great topic!


According to sources, the threat from a cold front caused this massive rally.

Hugh? Temperatures will not get close to damaging cold in coffee land the next 2 weeks.

Cool temps, maybe some 40's but at least 10 degrees too warm for frost/freeze damage.

https://www.barchart.com/futures/quotes/KC*0/futures-prices



Arabica Coffee Prices Close Sharply Higher at 2-Month High on Weather Concerns     by cmdtyNewswires - Wed Jul 22, 2:12PM CDT

Sep arabica coffee (KCU20) on Wednesday closed up +6.60 (+6.49%). Sep ICE Robusta coffee (DFU0) closed up +40 (+3.04%).

Coffee prices on Wednesday rallied sharply with arabica at a 2-month high and robusta at a 4-1/2 month high. Weather concerns in Brazil sparked short covering in coffee futures on Wednesday. Somar Meterologia, on Wednesday, said that a cold front early next week might threaten coffee crops in Brazil's coffee-growing regions.


metmike: No way. 

I will guess the weakening dollar, threatening to break out to the downside was a big factor.

Re: Re: Coffee
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By metmike - July 22, 2020, 9:41 p.m.
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So the last price was $1.0775/lb

1 tick higher would be $1.0780/lb  or in cents, 107.80

1 tick lower would be $1.0770/lb  or in cents, 107.70

Each cent/penny change is $375/contract.


https://www.theice.com/products/15/Coffee-C-Futures


Market Specifications

Trading Screen Product Name
Coffee "C" Futures
Trading Screen Hub Name
NYCC
Commodity Code
KC


Contract Size
37,500 pounds


Price Quotation
Cents and hundredths of a cent up to two decimal places
Contract Series
March, May, July, September, December


Minimum Price Fluctuation
5/100 cent/lb., equivalent to $18.75 per contract.


Settlement
Physical delivery
Grade/Standards/Quality
A Notice of Certification is issued based on testing the grade of the beans and by cup testing for flavor. The Exchange uses certain coffees to establish the "basis". Coffees judged better are at a premium; those judged inferior are at a discount.
Daily Price Limit
None
Deliverable Origins
Mexico, Salvador, Guatemala, Costa Rica, Nicaragua, Kenya, Papua New Guinea, Panama, Tanzania, Uganda, Honduras, and Peru all at par, Colombia at 400 point premium, Burundi, Rwanda, Venezuela and India at 100 point discount, Dominican Republic and Ecuador at 400 point discount, and Brazil at 600 point discount.
Delivery Locations
Exchange licensed warehouse in the Ports of New York District, Virginia, New Orleans, Houston, Miami, Bremen/Hamburg, Antwerp and Barcelona.

The New York and Virginia delivery points are par; the Bremen/Hamburg, Antwerp and Barcelona delivery points are at a discount of 1.25 cents/lb; and the New Orleans, Miami and Houston delivery points are at a discount of 1.25 cents per pound up to and including the March 2019 expiry, and at a discount of 0.50 cents per pound for the May 2019 and later expiries.
First Notice Day
Seven business days prior to first business day of delivery month.
Last Trading Day
One business day prior to last notice day
Last Notice Day
Seven business days prior to the last business day of the delivery month
By metmike - July 22, 2020, 9:59 p.m.
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The price charts below are updated.


I remember coffee trading around 50c for awhile back in the early 90's...........before  the massive freeze events in 1994.

Recent prices are down BELOW the 10 year lows:

Coffee charts going back 10 years:



     2 years


                   



3 Year below

                

                   


Coffee, 5 year chart below............cutworm, we are below the 5 year lows!

                   


 Coffee 10 years below

Drought in Brazil in 2014 caused a spike

Drought in Brazil and bad weather globally in 2010 caused the 2011 spike

Current price below the 10 year lows.

                

                   

                                    


            

                

                

Re: Re: Coffee
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By metmike - July 22, 2020, 10 p.m.
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As you probably know, the dry season for coffee country in Brazil often continues well into September. For those that are not aware of where the main growing areas are:

This is where they grow coffee in Brazil.....the worlds biggest producer.


The higher the number below, the greater the production. 1=highest.    

          

                       


Re: Re: Coffee
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By metmike - July 22, 2020, 10:03 p.m.
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Looking at the global picture of coffee production below.

Brazil matters the most!


 



It's always dry in coffee country at this time of year and 2 months away from when rains often kick off their rainy season.  They are finishing up harvest season right now.

Here is the global rainfall compared to average over the last 6 months. 

http://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.180day.figb.gif


http://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.180day.figb.gif


The maps below are for the past 90 days and 30 days rainfall:

http://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.90day.figb.gif

http://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.30day.figb.gif

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Re: Re: Coffee
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By metmike - July 22, 2020, 10:04 p.m.
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Here is a list of historic weather events from frost/freezes and droughts thru 2000.

We had a couple of major droughts after that though.......2014 was the big one. 

The coffee growing region shifted much closer to the equator around 3 decades ago to lessen the risk of cold and since then, mainly the 1994 freezes did major damage.  Global warming has also helped too. 


                                                                                        

BodyDate Posted & Author
                            

 Coffee Frost and                       Drought History

   
DateSeverity (Damage)Coffee Frost or Drought
1902 (Late July/early August)DevastatingF*
1918 (June 24-26)SevereF*
1942 (Late June/early July)SevereF*
1943ModerateF*
1953 (July 4-5)SevereF*
1955 (July 30-August 1)Severeslight F
1957SevereF*
1962 (July 25-26)MinorF*
1963 (August 5-6)ModerateF and D
1965MinorF*
1966 (August 6)Severeslight F
1967 (June 8)MinorF*
1969 (July 9-10)ModerateF*
1972 (July 8-9)ModerateF*
1975 (July 17-19)Very SevereF*
1978 (August 13-16)ModerateF*
1979 (June 1)ModerateF*
1981 (July 20-22)SevereF*
1984 (August 25)MinorF*
1985 (August-November)MinorD
1988MinorF*
1994 (June 25-26 and July 9-10)Severe/Very SevereF and D
1999 (August to November)Severe (40% crop lost)
2000 (July 17)Moderate (est)F*
                                                             

* In most cases frost or drought was not                    indicated by the source.  Although only F is written in                    these cases it is likely a combination of the two forces                    that caused a devastating coffee crop.

                                    


Re: Re: Coffee
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By metmike - July 22, 2020, 10:06 p.m.
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Coffee used to rally in May, dialing in risk premium for a potential frost/freeze but the last severe one(s) were in 1994 because they moved the coffee plantations farther north, closer to the equator after devastating freezes in the previous decades in far Southern Brazil.

Global warming has helped out a bit too.  

The coffee crop is harvested at this time of year(their Winter, our Summer) so there is harvest pressure as well as frost risk premium(especially in the past-when freezes were more of a threat) coming out of prices which often pressures coffee prices lower at this time of year.  

Note the historical spike low during the current time frame into mid August............looks like we made an early low this year?

Coffee

Kaffee saisonal

                                    


Re: Re: Coffee
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By rockitck - July 22, 2020, 10:20 p.m.
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yw

Re: Re: Coffee
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By metmike - July 25, 2020, 11:19 p.m.
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Coffee Prices Settle Higher on Demand Optimism

                            

                                            https://www.barchart.com/story/futures/quotes/KC*0/futures-prices/149674/coffee-prices-settle-higher-on-demand-optimism                                                         

                       cmdtyNewswires                                                                                                -                                                                                        Fri Jul 24, 2:20PM CDT                                                        

                                                                        

Sep arabica coffee (KCU20) on Friday closed up +0.90 (+0.84%). Sep ICE Robusta coffee (DFU0) closed up +8 (+0.59%).

Coffee prices on Friday settled higher and consolidated below Thursday's significant highs. Demand optimism gave coffee price a lift Friday after Fitch Solutions said consumer spending on coffee globally should rise +5.8% y/y in 2020, well above the 2015-2019 average of +1% y/y, as consumers will purchase more coffee for home consumption as the pandemic forces more coffee consumers to work from home.

On Thursday, arabica climbed to a new 2-month high, and robusta rose to a 5-1/2 month high, on weather concerns in Brazil. Somar Meterologia said Wednesday that a cold front early next week might threaten coffee crops in Brazil's coffee-growing regions.

A steady decline in robusta coffee inventories is also bullish for robusta coffee futures as ICE-monitored robusta coffee inventories fell to a fresh 1-1/2 year low Friday.

A bearish factor for coffee is concern that rising Covid infections in the U.S. will curb coffee demand as some states may be forced to re-impose lockdown measures that keep consumers away from restaurants.

Coffee prices are seeing downward pressure from the forecast for below-normal rain in Brazil's coffee-growing regions, which could speed the pace of Brazil's coffee harvest. Somar Meteorlogia Monday said that there was only 0.7 mm of rain in Mina Gerais in the past week or 19% of the historical average.

Robusta coffee also has support from reduced exports from Vietnam, the world's biggest robusta coffee producer. Last Monday's data from the General Department of Vietnam Customs showed that Vietnam's June coffee exports fell -11.5% y/y to 127,700 MT. However, Jan-Jun Vietnam coffee exports are up +2.2% y/y at 941,057 MT. The USDA's Foreign Agricultural Service (FAS) on June 10 forecasted that Vietnam's 2020/21 coffee production would fall -3.5% y/y to 30.2 mln bags.

On the positive side for coffee prices, CeCafe last Tuesday reported that Brazil June green coffee exports fell -9.8% y/y to 2.47 million bags. In the 12 months ended June, Brazil green coffee exports fell -4% y/y to 35.9 mln bags.

Another supportive factor is tightness in ICE-monitored arabica coffee inventories, which fell to a 2-3/4 year low of 1.594 mln bags on Monday.

                                                                                                                                                                                                                                                    

metmike: Temps will not be anywhere close to cold enough for damage to the coffee crop/plants.

By metmike - July 30, 2020, 2:47 p.m.
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Coffee up sharply again today, Thursday.

It is definitely NOT from weather.

The dollar breaking out to the downside is making all ag products cheaper and put upward pressure on prices based on the expected in increase in demand from the cheaper prices.


Re: Re: Coffee
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By metmike - Aug. 19, 2020, 4:10 p.m.
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https://mb.boardhost.com/coffeetraders/msg/1597857435.html

AB413407-6-FD3-4-E3-B-B172-CD8-B8763-DAA7


+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

1-EBAEE93-E7-E6-456-C-9685-1569-FAD20952

By metmike - Aug. 19, 2020, 4:12 p.m.
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A0-A113-D5-DEAF-4341-B9-B6-684-B29-BC6782

Re: Re: Coffee
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By metmike - Aug. 19, 2020, 4:30 p.m.
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https://www.barchart.com/futures/quotes/KC*0/futures-prices


Coffee Prices Fall Back After Posting New Highs

                            

                                                            Rich Asplund -                                                                                                                            Barchart                                                                                                -                                                                                        53 minutes ago                                                        

                                                                        

Sep arabica coffee (KCU20) on Wednesday closed the day down -0.85 (-0.71%), and Sep ICE Robusta coffee (RMU20) closed -19 (-1.29%).

Sep arabica coffee on Wednesday posted a new 2-week high and Sep robusta coffee posted a new 8-month high, but both contracts then fell back on some long liquidation pressure and closed the day with moderately large losses.

Coffee prices have recently seen strength from falling inventories after ICE-monitored arabica coffee inventories on Wednesday dropped to a 3-1/4 year low of 1.354 mln bags. Meanwhile, ICE-monitored robusta coffee inventories fell to a fresh 1-3/4 year low on Wednesday.

Somar Meteorologia is forecasting some rain in coffee-growing areas through the weekend, which may trigger tree flowerings. However, Somar is then forecasting a possible spell of dry weather and above-average temperatures starting next week.

Robusta coffee is seeing support from tighter supplies after the General Department of Vietnam Customs reported last Wednesday that Vietnam's July coffee exports fell -22% y/y to 141,282 MT and that cumulative Vietnam Jan-Jul coffee exports fell -1.01% y/y to 1.05 MMT. The USDA's Foreign Agricultural Service (FAS) on June 10 forecasted that Vietnam's 2020/21 coffee production would fall -3.5% y/y to 30.2 mln bags. Vietnam is the world's largest producer of robusta beans.

By metmike - Aug. 20, 2020, 9:34 p.m.
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Coffee  Futures Market News and Commentary

      Coffee Prices Resume Strength on Falling Inventories     by Barchart - Thu Aug 20, 2:11PM CDT

Sep arabica coffee (KCU20) on Thursday closed +0.10 (+0.08%), and Sep ICE Robusta coffee (RMU20) closed +6 (+0.41%).

Coffee prices on Thursday closed higher and consolidated below Wednesday's highs, where Sep arabica coffee posted a new 2-week high and Sep robusta coffee posted a new 8-month high.

Coffee prices have recently seen strength from falling inventories. ICE-monitored arabica coffee inventories on Thursday dropped to a 3-1/2 year low of 1.353 mln bags, and ICE-monitored robusta coffee inventories on Thursday fell to a fresh 1-3/4 year low of 10,945 lots.

Somar Meteorologia is forecasting some rain in coffee-growing areas through the weekend, which may trigger tree flowerings. However, Somar is then forecasting a possible spell of dry weather and above-average temperatures starting next week.

By metmike - Sept. 3, 2020, 1:15 a.m.
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Coffee Prices Close Lower on Consolidation Below Tuesday's Highs

                            

                                                            Rich Asplund -                                                                                                                            Barchart                                                                                                -                                                                                        Wed Sep 2, 2:02PM CDT                                                        

                                            https://www.barchart.com/story/futures/quotes/KC*0/futures-prices/196834/coffee-prices-close-lower-on-consolidation-below-tuesdays-highs                            

Dec arabica coffee (KCZ20) on Wednesday closed down -0.10 (-0.08%). Jan ICE Robusta coffee (RMF21) closed down -23 (-1.56%).

"Coffee prices on Wednesday fell back and consolidated below Tuesday's highs. Coffee prices were under pressure Wednesday on negative carry-over from Tuesday when the International Coffee Organization (ICO) projected a 2019/20 coffee surplus as the effects of the global COVID pandemic undercut coffee demand and boosted supplies. ICO on Tuesday said that it now sees a global 2019/20 coffee surplus of +952,000 bags versus its previous forecast for a global coffee deficit of -486,000 bags.

Coffee prices have trended higher over the past three weeks on falling inventories, with arabica coffee posting an 8-month high Tuesday and robusta coffee posting a 1-1/2 year high. ICE-monitored arabica coffee inventories on Tuesday dropped to a 20-1/2 year low of 1.232 mln bags. Also, ICE-monitored robusta coffee inventories last Friday fell to a 20-month low of 10,908 lots.

Coffee prices also have support on Tuesday's data from ICO that showed global 2019/20 coffee exports during Oct-Jul fell -5.3% y/y to 106.59 mln bags.

Recent dry weather in Minas Gerais, Brazil's biggest arabica coffee growing region, may lead to smaller coffee yields and is bullish for coffee prices. Somar Meteorologia said Wednesday that limited rain is expected over the coming days and that soil moisture levels in Minas Gerais are currently only 20% to 30%, below the ideal level of 60% for crop development.

The outlook for a smaller coffee crop in Vietnam, the world's largest robusta coffee producer, is boosting robusta prices. The CEO of Simexo Dak Lak, Vietnam's second-largest coffee exporter, forecast that Vietnam 2020/21 coffee production will fall -4.8% to 1.72 MMT, citing lower coffee yields from a drought this year during the coffee tree flowering period in Vietnam's Central Highlands, the country's biggest coffee-growing area.

The recent up move in coffee prices has been supported by fund buying. Last Friday's Commitment of Traders (COT) report showed that funds boosted their net-long positions in ICE arabica coffee futures by 7,249 contracts to a 7-month high of 35,0312 contracts in the week ended Aug 25. Also, funds boosted their net-long positions in ICE robusta coffee futures by 3,744 contracts to a 3-year high of 9,279 contracts in the week ended Aug 25. The extreme long coffee positions by funds, however, increases the threat of long liquidation pressure.

Robusta coffee is seeing support from tighter supplies after the General Department of Vietnam Customs reported Sunday that Vietnam's cumulative Vietnam Jan-Aug coffee exports fell -1.3% y/y to 1.161 MMT. The USDA's Foreign Agricultural Service (FAS) on June 10 forecasted that Vietnam's 2020/21 coffee production would fall -3.5% y/y to 30.2 mln bags."

By metmike - Sept. 3, 2020, 1:25 a.m.
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We are still in the dry season, which can often last into the month of October.


The market will be looking for rains to emerge in Brazil by sometime in October, not much rain in the forecast in outlooks into mid October would get increasingly bullish.


Here is an example of a city in coffee country and the type of climate there.

Not much rain May-Sept, during their Winter/dry season,  then rains really pick up in the 2nd half of Oct and Nov.  Peaking with 10+ inches in both December and January! The middle of their Summer. During those months, it rains on more than half of the days.

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

Belo Horizonte is located in Minas GeraisBelo Horizonte
Belo Horizonte
Localization in Brazil
Coordinates: 19°55′S 43°56′WCoordinates: 19°55′S 43°56′W
Country Brazil


Climate in Belo Horizonte (Minas Gerais), Brazil

https://weather-and-climate.com/average-monthly-Rainfall-Temperature-Sunshine,Belo-Horizonte,Brazil

  


            

Average monthly snow and rainfall in Belo Horizonte (Minas Gerais) in inches

              

This is the mean monthly precipitation over the year, including rain, snow, hail etc.
Show average precipitation in Belo Horizonte in Millimeter »                              

              Average precipitation (rain/snow) in Belo Horizonte, Brazil   Copyright © 2020 www.weather-and-climate.com      

* Data from weather station:    Belo Horizonte, Brazil.

                      

      

        

   

Monthly rainy days

  

The average number of days each month with rain, snow, hail etc.

        Average rainy days (rain/snow) in Belo Horizonte, Brazil   Copyright © 2020 www.weather-and-climate.com           

 

By metmike - Sept. 4, 2020, 4:33 p.m.
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https://www.barchart.com/futures/quotes/KC*0/futures-prices


Coffee Prices Settle at an 8-1/2 Month High on Falling ICE Inventories and Reduced Coffee Exports from Colombia

                                                   

Dec arabica coffee (KCZ20) on Friday closed up +2.80 (+2.13%). Jan ICE Robusta coffee (RMF21) closed up +8 (+0.55%).

Coffee prices on Friday rallied to 8-1/2 month highs on falling inventories and reduced coffee output in Colombia, the world's second-largest producer of arabica beans. Coffee prices have trended higher over the past three weeks on dwindling inventories. ICE-monitored arabica coffee inventories on Thursday dropped to a 20-1/2 year low of 1.192 mln bags. Also, ICE-monitored robusta coffee inventories last Friday fell to a 20-month low of 10,908 lots.

Arabica coffee also garnered support on reduced supplies from Colombia after Friday's data from the Colombia Coffee Growers Federation showed Colombia Aug coffee exports dropped -8% y/y to 1.118 mln bags.

Recent dry weather in Minas Gerais, Brazil's biggest arabica coffee growing region, may lead to smaller coffee yields and is bullish for coffee prices. Somar Meteorologia said Wednesday that limited rain is expected over the coming days and that soil moisture levels in Minas Gerais are currently only 20% to 30%, below the ideal level of 60% for crop development.

Coffee prices also have support on Tuesday's data from ICO that showed global 2019/20 coffee exports during Oct-Jul fell -5.3% y/y to 106.59 mln bags.

The outlook for a smaller coffee crop in Vietnam, the world's largest robusta coffee producer, is boosting robusta prices. The CEO of Simexo Dak Lak, Vietnam's second-largest coffee exporter, forecast that Vietnam 2020/21 coffee production will fall -4.8% to 1.72 MMT, citing lower coffee yields from a drought this year during the coffee tree flowering period in Vietnam's Central Highlands, the country's biggest coffee-growing area.

The recent up move in coffee prices has been supported by fund buying. Last Friday's Commitment of Traders (COT) report showed that funds boosted their net-long positions in ICE arabica coffee futures by 7,249 contracts to a 7-month high of 35,0312 contracts in the week ended Aug 25. Also, funds boosted their net-long positions in ICE robusta coffee futures by 3,856 contracts to a 3-year high of 13,135 contracts in the week ended Sep 1. The extreme long coffee positions by funds, however, increases the threat of long liquidation pressure."


metmike: The rainy season does not even start for well over a month in Brazil's coffee land so rains would not be expected in September. 


By metmike - Sept. 16, 2020, 4:38 p.m.
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metmike: Huge, very early rainy season rain coming up.


Coffee Prices Settle Mixed and Consolidate Above Monday's 4-Week Lows

                                                                                        Rich Asplund -                                                                                                                                                                                               -                                                                                        1 hour ago                                                        

                    https://www.barchart.com/futures/quotes/KC*0/futures-prices                                                    

Dec arabica coffee (KCZ20) on Wednesday closed down by -1.95 (-1.60%). Jan ICE Robusta coffee (RMF21) closed up +3 (+0.21%).

Coffee prices on Wednesday settled mixed as they consolidated modestly above Monday's 4-week lows. Massive long liquidation by funds this week has pressured coffee prices, sparked by forecasts for beneficial rain in the coffee-growing areas of Brazil. Somar Meteorologia said Wednesday that beneficial rain starting Sep 21 in Minas Gerais will lead to widespread coffee flowering.

Coffee prices on Sep 4 surged to 8-1/2 month highs on concern that excessive dryness in Brazil will undercut coffee yields. Maxar said last Thursday that recent dryness across the northeastern portion of Minas Gerais would not be favorable for coffee flowering. The region has received as little as 10% of normal rain in the past month. Also, the U.S. Climate Prediction Center last Thursday said a La Nina weather pattern has emerged in the Pacific Ocean, which could lead to below-average precipitation in Brazil in Q4, according to Maxar.

A positive factor for coffee is Tuesday's data from the Green Coffee Association that showed U.S. Aug green coffee inventories fell -4.4% m/m and -6.6% y/y to 6.745 mln bags.

Coffee prices also have support on dwindling inventories. ICE-monitored arabica coffee inventories on Tuesday dropped to a new 20-1/2 year low of 1.117 mln bags. Also, ICE-monitored robusta coffee inventories on Aug 28 fell to a 20-month low of 10,908 lots.

The recent up move in coffee prices has been supported by fund buying. Friday's Commitment of Traders (COT) report showed that funds boosted their net-long positions in ICE arabica coffee futures by 5,866 contracts to a 4-year high of 48,450 contracts in the week ended Sep 8. Also, funds increased their net-long positions in ICE robusta coffee futures by 2,105 contracts to a 3-year high of 15,240 contracts in the week ended Sep 8. The extreme long coffee positions by funds, however, increases the threat of long liquidation pressure.

Re: Coffee
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By WxFollower - Sept. 26, 2020, 11 p.m.
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 I just came across this retro Marketforum post of mine from 2003 with a reply by "Office Boy". Mike or anyone else, do you remember him? He, Cofco, Nagual, Susannah, Susan were regular coffee posters among others:


COFFEE:Where exactly in MG is "Triangulo Mineiro"? (MarketForum post)
Larry E. - Wednesday at 1:57 PM(10/22/03)

I often see references to the Triângulo Mineiro in coffee news: 

1) Is this referring to the part of western MG that sticks out in a triangular shape in the direction of MGDS and includes Uberaba? 

2) About what % of MG's coffee is grown there? 

3) IF this region is there, does that mean that the major coffee area near the SP/MG border (including Pocos De Caldas of southwestern MG) is NOT in the Triângulo Mineiro? 

4) Does the major coffee growing region of SW MG that includes Pocos de Caldas have a name? Approximately what % of MG's coffee is grown there? 

Thanks, Larry 


Re: COFFEE:Triangulo Mineiro
Office Boy - Wednesday at 6:37 PM (10/22/03)
In response to: COFFEE:Where exactly in MG is "Triangulo Mineiro"? 

Triangulo Mineiro is also known as the Cerrado Mineiro. Uberaba and Uberlandia are in this region but that's cattle territory. Serious planting of coffee began in the 70's. It's flat, good for mechanized harvesting, frost free and much of the coffee is irrigated. The downside is it gets hot. Even irrigated crops can suffer from heat. 

The state of Minas Gerais is all arabica country and the source of most of the good quality coffee in Brazil. There are three coffee regions in MG. In addition to the Triangulo/Cerrado Mineiro (towns like Patrocinio, Monte Carmelo) in the west, you have the South, #1 producing area in all of Brazil (towns like Varginha, Guaxupe, Tres Pontas) , sometimes referred to as the Southeast and then the Zona da Mata (towns like Manhuacu, Caratinga) in the East/Northeast part of the state. 

Pocos de Caldas, in the South/Southeast, differs from the rest of the area by being at an elevation of approx. 3,000 feet. Production is relatively small but quality is good. Problem location this year, output affected. 

Here are the stats for the state of MG by region: South 01/02=7.5 mb 02/03=13.5 mb 03/04 est.=7.5 mb, Zona da Mata 01/02=4.5 mb 02/03=6.5 mb 03/04 est=3.5mb, Triangulo 01/02=3.5 mb 02/03=5.0 mb 03/04 est 3.5 mb. 

As you can see, substantial estimate adjustments were made earlier this year for 03/04 (crop just harvested) for a variety of reasons including fertilizer use cutbacks, insufficient rain last year at some key development stages and to some extent a lower biennial output. 

----------------------------------------------------------------------------------------------------------------------------

 Aside: IF model consensus is accurate, it's going to be hot and mainly dry the next 10+ days over most of the top Arabica producing areas of Brazil, many of which are still dry as that last rain of early this week wasn't heavy in most areas. They're suggesting general rains not returning at least til after the first week of Oct. Being that this heat/dry would extend through most of, it not all of, the first 1/3 of Oct, I'd be wary of the possibility that the Arabica market will take note and put some risk premium back in. Perhaps Fri's rise was related? Just prior to that, it had dialed in a bearish/very large new crop, thus leading to a big drop in prices last week (which was aided by COVID related demand concerns). If the early week rains induced a flowering, that flowering may be in danger of not holding up well assuming the models are right. If so, this would increase the risk that that very large crop won't materialize.

  Regardless, the models can be off, of course, especially after day 7 or so. However, if they're not, I'd say this would be one of the hottest and driest very late Sep/early Oct that I could recall there since I started following that area. From what I know, the last real significant spring drought may be as far back as 1999. Prior to that, there was one in 1985.

Re: Re: Coffee
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By metmike - Sept. 27, 2020, 8:09 p.m.
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Hi Larry!

Great to hear from you!


I've been tied up with a project cleaning and re-mortaring the bricks on our 1,600 sq foot patio and not made as many trading/weather posts recently but was actually watching this one with interest last week. 

Good points. The meteorological/climate reality is that we are still more than 2 weeks from the start of the rainy season for coffee land and have plenty of time for rains to help with soil moisture deficits and trigger flowering and it will not get serious unless it extends thru much of October.............however, its definately not too early for the market to get worried, especially since long range forecasts with the La Nina are bullish and the next 2 weeks will feature some intense heat in this area which is going to increase stress on trees that haven't had a good drink since the end of last years rainy season.....early last Fall for them....probably March but maybe April.


There is potential rain for the southern coffee belt(which is how it usually starts with the rainy season but the  north looks pretty dry and the heat ridge extremely impressive.

I'll try to have more later tonight.

I don't get the EE for South America anymore. Do you know what it shows?

By metmike - Sept. 27, 2020, 8:24 p.m.
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I'll have to go back in my records to see if I have anything but I remember at least a couple of other dry Springs/Octobers in the last 20 years that really got the coffee market exited during October. 

You are right that any flowering triggered by recent rains will abort if it stays as hot as forecast for 2 weeks in those areas. 


Also, coffee seasonals are pretty positive for the next month, especially if the rainy season is slow to start.


I would not want to be short here until the pattern shows a big rain pushing much farther north. 




Re: Re: Coffee
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By metmike - Sept. 28, 2020, 5:18 a.m.
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0z gfs ensemble had more rain in coffee land!


Added graphic/forecast for 15 day rains below:

By metmike - Sept. 28, 2020, 11:07 a.m.
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06z GFS Ensemble continued that trend and showed even more rains, farther north into most of coffeeland!


By WxFollower - Sept. 28, 2020, 10:21 p.m.
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 Thanks, Mike. Ironically, the maps indeed changed to wetter since I posted/starting at 0Z last night. Had I then been posting, I would have changed my tone vs the prior post from Saturday night. 

 I had suspected that Fri’s strong rise was mainly from discounting the chance that the crop won’t be as big as forecasted due to hot/dry forecasts extending at least through Oct 7th and possibly to Oct 10th since just that could easily be enough to reduce the production from any initial flowering even if good rains were to follow. For similar reasons, I strongly suspect today’s strong drop was due to the maps being wetter since 0Z though the market hardly dropped til the even wetter 6Z came out. More drop is quite possible if the wetter maps persist overnight although there still is a good bit of heat and dry to get by first, regardless, and week 2 maps, especially, late week 2, are much less reliable than week 1. In addition, there still is not a whole lot of rain showing for northern areas yet though they're normally drier. Due to the wetter maps, I’d be very wary about getting long here. However, due to today’s big drop back, KC being so much lower than 2.5 weeks ago and lots of heat and dry this week into at least early next week, I’d also probably be scared to go short here.



Re: Re: Coffee
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By metmike - Sept. 29, 2020, 12:09 a.m.
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Thanks Larry!

I agree with you on all of that. 

Prices have dropped too far and rains on too many model runs to get short on the same thing..........models that have rains which the market already knows is coming.


I disagree with the comment below that attributes todays drop to rains that fell already. Those were dialed in earlier this month, ahead of the rains. 

New rains showing up the past 24 hours  on weather forecast models caused the price to drop on Monday.

https://www.barchart.com/story/futures/quotes/KC*0/futures-prices/337485/arabic-coffee-plunges-to-a-2-month-low-as-dry-conditions-ease-in-brazil

"Coffee prices on Monday sold off sharply with arabica coffee prices falling to a 2-month low. Signs of abundant rain in Brazil eased concern about dry conditions and sparked fund selling in coffee futures. Data from Somar Meteorologia on Monday showed that rain in Minas Gerais measured 31.5 mm in the past week or 157% of the historical average. Dry weather in Brazil has recently been a supportive factor for sugar prices. The U.S. Climate Prediction Center last Thursday said a La Nina weather pattern has emerged in the Pacific Ocean, which could lead to below-average precipitation in Brazil in Q4."

Re: Coffee
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By WxFollower - Sept. 30, 2020, 9:20 p.m.
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 Arabica  coffee appears to be at a crucial point. The upcoming modeled bearish wet period, mainly for southern areas, is still mostly intact starting ~10/10-1. However, before that the much warmer than normal (~10-15 F above normal) and mainly dry bullish period is also still very much intact. The dry, hot period started 9/26, meaning the projection is that it will end up a full 2 weeks of hot and dry. in some cases, record highs are being set and will continue to be. As I said, I don't recall seeing as longlasting and intense a hot/dry period as this at this time of year or at any time for that matter. Furthermore, most areas have been drier than normal since spring. See Mike rainfall maps further up in this thread.

 There is apparently now the first main flowering event in much of the main regions from the first widespread, moderate rain event that occurred during 9/20-2. From what I've read, a flowering followed by too long a stretch of of intense hot and dry often results in many flowers being aborted. Let's assume for now that the wet will really get going 10/10 in southern areas. What I'm trying to figure out is whether or not significant damage likely will have already been done to this flowering (next good rain coming too late for it). Combining this with drier than normal most of the last 6 months means extra stress has already been placed on the trees along with dry subsoils. Looking at his 6 month world map, most of the major Arabica areas have had near the lowest percent of normal rainfall on the entire map.

 Considering all of the above, I find it hard to believe that the projected near record crop is still going to materialize even if rains were to occur at regular intervals Oct 10th+, but we'll see. Any other opinions?



Re: Re: Coffee
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By metmike - Sept. 30, 2020, 10:41 p.m.
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Thanks Larry!


You make some good points. The market went from $1 to $1.35 from mid July to early September and one assumes that it was speculating on some of this.

It's still very early in the rainy season and if rains continue to shift north, like they do seasonally then things will improve there.

This hot spell coming up is pretty impressive but also well known for a week...........old news.

It could cause early flowering to abort. Not sure of that but there is tons of time for more rain events to trigger abundant flowering. 

You can never tell what will happen when speculation take over.

I am thinking that this dry weather probably has hurt unirrigated new coffee trees......planted in the last couple of years that don't have deep roots. 


However, it's not unusual to still be dry into early October in this part of Brazil. 



By metmike - Sept. 30, 2020, 10:53 p.m.
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18z GFS ensemble rain total for the next 15 days.

By WxFollower - Sept. 30, 2020, 11:08 p.m.
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Mike,

  Thanks for your thoughts. What % of arabica is irrigated? TIA

By metmike - Oct. 1, 2020, 4:59 a.m.
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Good question on irrigation.

I wish I knew. Maybe we can figure that one out by searching,

Re: Re: Coffee
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By metmike - Oct. 1, 2020, 10:53 a.m.
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Here is the 6z GFS ensemble, the latest run. It continues to show a very nice rain event for much of coffeeland(consistent on this since late Sunday), especially for this early in the year(before the main rainy season has even started).

There is a decent area of 1-2+ inches of rain for totals the next 15 days, all of which are in week 2...actually after day 10.

This will trigger widespread flowering.

The pattern does not look like it will go back to hot and dry right after this but it could.




Re: Re: Coffee
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By metmike - Oct. 1, 2020, 1:28 p.m.
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The 12z GFS operational model has massive rains for coffee-land: 


By WxFollower - Oct. 2, 2020, 12:49 p.m.
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 No change from the entire week with bullish hot/mainly dry through ~10/9 (including record heat) and mainly wet/cooler due to rains starting ~10/10-11.

 I maintain that there will be some reduction in the very large crop as a result of 2 weeks of hot/dry causing the first main flowering (caused by first good rains of season 9/20-2) to be negatively affected. In other words, the very nice rains projected for 10/10-1+ will probably be too late to help that flowering much, if at all.

By metmike - Oct. 2, 2020, 5:23 p.m.
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Thanks Larry,

I am not in total agreement with you. 

On the no change, am not sure if you mean prices or weather but rains increased on models, especially compared to the end of last week and also compared to when we first started trading at the start of this week.


On prices, we closed almost 5c lower today vs the close last Friday.

On the flowering, I agree that there will likely be some aborted flowering, especially since this initial rain event was very early, before the main rainy season has even started and is on drought stressed trees that are getting hit with this period of HOT and dry before the abundant rains hit in week 2.

However, coffee plants are not like corn or apples/peaches and many other plants that flower one time, then have 1 shot at pollination for several days and its over.

When an orchard sees flowering in the Spring, then gets hit with a freeze at any point after that...........it's over. The trees will produce 0 new flowers and the ones that survived the freeze are the ones that turn into apples or peaches.

Coffee always has multiple flowerings. Often as many as 4. Even if we abort much of this first flowering, the plants will make up for much of  it with an abundance of future flowering. 

An unusually early flowering like we had this year exacerbates a big problem with the coffee harvest............cherries that ripen at different times from the different flowerings.

The earlier and later the flowerings the bigger the challenge in picking the mature cherries from the early flowerings, while leaving the ones from later flowerings to ripen for several more weeks.

For sure, aborting a very early flowering is an unfavorable event because it undoes a good thing. It probably takes a bit of energy away from the plant but maybe not that much and if there is a drought, the plant doesn't have great reserve.

But most if not all that can be offset if drought busting, regular rains come and continue at regular intervals(too many rainy days in a row can actually be bad though and mess up the viability of the flowers).

A long lived dry spell like we've had in Brazil is actually required for abundant flowering and it happens every year..............but this year, it was dry enough to draw down soil moisture, so there isn't much in reserve for, especially the younger(not producing yet) trees that still have shallow roots.

I would bet they will need to do alot of replanting of 1 and 2 year old trees but they would not have produced anything this year, so will not  have reduced the 2021 production.



By WxFollower - Oct. 2, 2020, 5:48 p.m.
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Mike,

 My "no change" was talking about the overall predicted wx pattern for the first half of Oct, which is looking about the same as it has all of this week with very hot and dry through ~10/9 followed by very nice and widespread rains soon thereafter.

 Don't forget that the current period isn't just dry and hot. It is very hot with record heat in many cases, which will stretch out to two weeks when all is said and done per models.

  

By metmike - Oct. 3, 2020, 9:55 p.m.
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Thanks Larry,

To me, the forecast has been getting a bit wetter most days.

Part of this is that we are getting one day closer to the big rains and adding another wet day at the end of the forecast from what looks like a pattern change.......not a one and done deal that reverts back to very hot/dry.

At the same time, we are using up/subtracting 1 more very hot/dry day from the early part of the forecast as time passes as those days become history....eventually going to zero very hot/dry days left.


Last 18z GFS operational model below.

Below that, the last 18z GFS ensemble. A 3 inch total rain contour in the heart of coffee land for the 15 day period, with huge rains extending around that is pretty impressive.



By metmike - Oct. 5, 2020, 11:15 a.m.
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At some point, these massive rains will be dialed in and the market will not be able to go lower from just the rains.

This is the last 6z GFS ensemble for total 2 week rains. 3+ inch contour is in purple over eastern Brazil which is coffee land. 

By metmike - Oct. 14, 2020, 1:15 a.m.
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                Re: Re: Re: Re: South America Oct/Nov 2020      

                By WxFollower - Oct. 13, 2020, 5:09 p.m.            

            

 It still looks wet in most of the prime arabica coffee areas of Brazil for the forseeable future. Regardless, a decent amount of damage likely occurred during the intense hot/dry period of ~9/23-10/9.

Re: Re: Coffee
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By metmike - Oct. 14, 2020, 1:19 a.m.
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Thanks Larry,

Like you said, tons of rain still on the way for coffee-land!

It's really not that unusual for the rainy season to start this time in October for that part of Brazil.


By WxFollower - Oct. 14, 2020, 6:32 p.m.
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Mike said: “It's really not that unusual for the rainy season to start this time in October for that part of Brazil.”

————————————-

Mike,

  I realize that as I’ve followed the wx down there at times over the last ~21 years and also have studied past wx stats. But what is unusual is the combo of much below normal rainfall the prior 6 months combined with record high temps almost every day for 2 weeks during the dry period right after the first major flowering.

By metmike - Oct. 14, 2020, 7:33 p.m.
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I think that the trees which are only a couple of years old suffered the most damage because they did not have the root systems to tap enough moisture. 

A high % of those that were not irrigated could have(it seems likely) perished. 

Those trees/plants, even in great shape would not be old enough to contribute much if any to production with this current crop though. 

They will need to be replanted.


How much damage happened to older producing trees?

Beats me. Probably the unusually early flowering event in September was aborted but coffee plants will have numerous flowerings and if an initial one is aborted because of hot/dry weather, I'm guessing that flowering events from rains that follow would probably be more robust, than if the plants already had early cherries from an initial flowering. 

For sure it was a bad start and the hot/dry weather hurt and must have reduced potential compared to what it could have been with a perfect start, followed by perfect weather.

What would be interesting is if we get into a situation where there is TOO MUCH rain and this causes an issue with the plants being able to set their blooms properly. 

This really can happen. Seasonals are strong for coffee and tons of rain is already dialed in. I would be looking to go long on too much rain(if we keep adding rains) here and not hot/dry.

By WxFollower - Oct. 15, 2020, 2:36 a.m.
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Mike said:

 "What would be interesting is if we get into a situation where there is TOO MUCH rain and this causes an issue with the plants being able to set their blooms properly. 

This really can happen. Seasonals are strong for coffee and tons of rain is already dialed in. I would be looking to go long on too much rain(if we keep adding rains) here and not hot/dry."

-------------------------------------------------------------------------------------------------------

That's interesting. Do you happen to know of any specific springs when too much rain actually became a significant problem? Thanks in advance.

By metmike - Oct. 15, 2020, 2:46 a.m.
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I'll have to try to find something on it but don't have anything handy other than my memory of it happening at least once. 

Re: Re: Coffee
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By metmike - Oct. 15, 2020, 11:24 a.m.
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Physiology of Coffee Flowering

https://ecofriendlycoffee.org/physiology-of-coffee-flowering/

Moisture

Excessive moisture results in the imbalance of growth regulators and promoters and a particular hormone responsible for vegetative phase comes into play. This drastically reduces the number of flowers. Under such conditions the bush appears healthy, but the productivity suffers. On the other hand if it rains during the flower opening period, then water gets inside the bud and it starts to balloon up. The flower in such a situation will not set.

By metmike - Oct. 18, 2020, 9:02 p.m.
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18z, just updated GFS Ensemble below. Some places in coffee land getting 8 inches of rain. Much more than this and it may pose some problems and actually turn bullish for coffee. 


By WxFollower - Oct. 28, 2020, 10:52 p.m.
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 After a lull the last few days. Brazil coffeeland gets good rains the next few days followed by a near weeklong lull if models are correct. Then good rains return late in week 2+. So, overall, things look decent in Brazil despite a good number of areas still getting far less than average for Oct. I still wonder about previous damage/flower abortion from the record hot dry period of late Sep/early Oct following the very dry prior months, but I can only speculate about that.

 Looking elsewhere, the model consensus has today been suggesting possible long-lasting heavy rains next week due to a potential tropical cyclone that forms in the SW Car., gets stuck due to an upper ridge to its north centered in the Gulf, moves very slowly into Central America, and then sits there for days. The reason I'm mentioning this area is that Central America/S Mexico produce ~18 mill bags of some of the highest quality coffee in the world (mainly Arabica) or ~1/3 of the Arabica Brazil produces on average. And that’s larger than the 14 of Columbia, the 2nd biggest Arabica producer. So, though it isn't Brazil, it isn't small either. And this area's harvest starts around now. IF these very heavy rains were to verify, I wonder if the Arabica market would care. This area is a major exporter.


 A good portion of the main Vietnamese coffee producing regions have been hard hit with flooding this month and some of the N portion of these got still a lot more rain from a typhoon that just hit. There’s even a chance for more wet next week. But this is Robusta rather than Arabica. So, London mkt cares way more about this and has been up sharply this week as a result while NY is down.

By metmike - Oct. 28, 2020, 11:51 p.m.
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Thanks Larry!

I've not been following the weather in those places but its important to coffee right now as you noted.