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"Why Coffee Prices Exploded. What Next?"

by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter 

•  Wednesday Evening Report - May 22, 2024  

Coffee prices exploded again this week from on-going concerns that crop problems in Vietnam, Brazil and now Mexico from heat and dryness is lowering their crops.

You can see how, last Friday and Sunday night, we alerted WeatherWealth clients about the extreme Nov-Jan heat and dryness that may have compromised Brazil's coffee crop much more than had been expected.
 

My ClimatePredict weather program (above) shows the record heat that has damaged Brazil's soybean and orange crops and possibly some coffee production. The warm, dry weather has helped the big sugar crop hit the market.

The BestWeather Spider (used by traders in ETFs, futures, and commodity option around the world) became cautiously bullish on coffee, once we took out resistance on Monday. This Spider looks at everything from global weather scores to technical analysis, the CFTC's commitments of traders report, and economic factors for all commodities.

Overall, however, could coffee prices go back into a bear market if:  

• Expected Brazil harvest pressure comes up next month;
• There is a low chance for a Brazil frost this winter (their summer) and drought easing rains coming to Vietnam Robusta regions?

Does one sell call options on this big rally or buy breaks in futures? This is what we do at WeatherWealth.

One can also see how U.S. coffee consumption is falling:
 

So… how does one take advantage of the recent bull market in wheat on Russian weather problems? How do you trade the volatile cocoa market, or take a longer-term view on La Niña with respect to coffee and sugar prices?

Subscribe to a 2 week free trial period to WeatherWealth and receive the most actionable weather information and trading strategies from a 40 year seasoned commodity meteorologist and trading analyst for hedge funds, farmers and other investors:  https://www.bestweatherinc.com/new-membership-options/

Thanks for your interest in commodity weather!

Jim Roemer, Scott Mathews and the Weather Wealth Team.

• Please feel free to learn about Jim Roemer, our track record, and how we use weather to help traders, hedgers, and investors. If you have any questions, please don't hesitate to drop me a line  - Scott Mathews, Editor

Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He also is a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he established a unique standing among advisors in the commodity risk management industry.

Trading futures and options involves a significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results. There is no warranty or representation that accounts following any trading program will be profitable.