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:


The last 7 days:

                

                   



The last month below

     


                   



1 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

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

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.