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Coffeeshort

COFFEE - My Commodity of ChoiceI've laid out a plan I'm looking at on one of my favorite commodities - COFFEE ☕😍 What makes it so hard is the predictability of the weather - nearly impossible for the future. However, it is odd to see that the price still bonces at key support and resistance zones, almost like any "stock". Which tells me regular market trading still applies despite the odd weather event. The reason Coffee has fallen so hard over the past few months is supply - due to extremely favorable weather conditions, coffee supply is more than demand. Resulting, as market dynamics goes, in a drop of price. It's unfortunate though that my favorite pack of beans at the supermarket has not gone down - weird how that works 🙄 I like a medium roast, Columbia single origin. It's dropped -33% already, but I can clearly see the market structure entering bearish phase after the bullish phase, peak (the new high) and now likely a multi-month bearish season. The question is just where the price can bottom for such a well loved commodity. I looked at past cycles, not too long ago we dropped roughly 44% during the bearish cycle, taking 2-3 years to move into accumulation before another impulse wave up. That places a target for entry exactly in the highlighted zone around $250ish. But I wouldn't get too greedy on my favorite commodity, buying orders can't be too low either. This would likely have to be a multiyear hold. Pepperstone sells coffee on cash contract but I usually do futures. Pity that I didn't get in sooner, bullish cycles is also at least a 2 year journey. I'll sell when the weather is bad 😅 Next up? Chocolate for sure...
PEPPERSTONE:COFFEEShort
by BlockTechEv
4
Coffee SHORTCommodities Are Best Traded with Trend Following Delivering a comprehensive service of trading systems, risk management strategies and psychological guidelines allows our customers to trade in less than thirty minutes per day. Arabica coffee futures in the US traded around HKEX:194 per pound after hitting an over 6-month high of HKEX:205 on April 18th, on some profit-taking prompted by the recent rise amid low stocks and concerns that the slowing global economy could hurt coffee demand. On the supply side, the latest data showed ICE monitored arabica coffee inventories fell to a 4-1/4 month low of 700,048 bags. Meanwhile, dealers have said exports from key origins such as Brazil and Colombia were slumping. The International Coffee Organization projected another year of strong supply deficit in the coffee market, with a shortfall of 7.3 million bags, mainly due to arabica crop woes in Latin America's top producer. What moves coffee prices? There are several major factors that could affect coffee prices. If you are going to trade coffee it is important to understand the dynamics that drive prices. The ‘Big Four’ The largest buyers of coffee beans on the international markets are known as the so-called ‘Big Four’: Nestle (NESN), Kraft (KHC), Procter & Gamble (PG) and Sara Lee (SLE). Together, they purchase around 50% of all the coffee produced globally. They primarily buy Robusta beans, so their activity exerts a strong influence on prices. Climate As an agricultural commodity, coffee production is largely determined by the impact of weather conditions on sensitive crops. If the climate is conducive to growing coffee plants, prices can drop, but an unfavourable climate can cause prices to rise. This is because good weather during the growing season can increase the supply, while adverse weather conditions can damage crops or hamper their growth. As the five largest producers account for around 65% of global supply, weather conditions can have a significant effect on supply and, in turn, pricing. Arabica coffee prices soared to 10-year highs in late 2021, as drought and frost reduced output in Brazil and heavy rains affected production in Colombia. ICE-certified stocks fell to their lowest level in 22 years. Plant disease Agricultural commodities are also affected by other risks that can influence the condition of plants, such as disease. ‘Coffee leaf rust’ is a disease caused by a fungus that can devastate coffee crops. Robusta beans are more resilient than Arabica beans, which are more delicate and susceptible to damage from bad weather or disease. For example, global coffee prices rose sharply in 2013 after coffee leaf rust damaged crops in Central America and reduced supply. It was estimated that around 70% of Guatemala’s coffee production was affected. Consumer habits Coffee drinking trends are a key driver of demand and price direction. The emergence of specialty coffee shops is increasing demand for premium, artisan beans. Consumption is also changing in different parts of the world, with emerging markets such as in Asia leading demand growth because of rising incomes, changing tastes and growing populations. But the ongoing debate around the health effects of drinking coffee can also affect consumption. Although Arabica and Robusta beans have different flavours, major changes in the price for one can affect the demand for the other. If Arabica prices soar, demand for Robusta as a substitute could increase in response. Geopolitics As more than 90% of coffee is produced in developing countries, social unrest or political instability can disrupt coffee production and market sentiment. Futures prices respond quickly to geopolitical events in major producing nations. With Russia being the world’s sixth largest coffee consumer, the war in Ukraine and resulting sanctions has had an impact on coffee demand, and is expected to cause a supply surplus in the 2022 to 2023 growing season. Distribution costs The cost of transporting coffee around the world is factored into prices. Costs for fuel and shipping determine how expensive it is to distribute coffee. During the Covid-19 pandemic, high freight costs contributed to prices reaching decade highs. US dollar Commodity markets including coffee are often priced in US dollars, so the value of the dollar also affects prices. Dollar-denominated commodities become more expensive for buyers with other currencies when the dollar rises, which can weigh on demand. Meanwhile, coffee becomes cheaper when the dollar falls, increasing international demand.
CAPITALCOM:COFFEEARABICAShort
by DaveBrascoFX
COFFEE FUTURES (KC1!) Monthly, Weekly, DailyDates in the future with the greatest probability for a price high or price low. The Djinn Predictive Indicators are simple mathematical equations. Once an equation is given to Siri the algorithm provides the future price swing date. Djinn Indicators work on all charts, for any asset category and in all time frames. Occasionally a Djinn Predictive Indicator will miss its prediction date by one candlestick. If multiple Djinn prediction dates are missed and are plowed through by same color Henikin Ashi candles the asset is being "reset". The "reset" is complete when Henikin Ashi candles are back in sync with Djinn price high or low prediction dates. One way the Djinn Indicator is used to enter and exit trades: For best results trade in the direction of the trend. The Linear Regression channel is used to determine trend direction. The Linear Regression is set at 2 -2 30. When a green Henikin Ashi candle intersects with the linear regression upper deviation line (green line) and both indicators intersect with a Djinn prediction date a sell is triggered. When a red Henikin Ashi candle intersects with the linear regression lower deviation line (red line) and both indicators intersect with a Djinn prediction date a buy is triggered. This trading strategy works on daily, weekly and Monthly Djinn Predictive charts. Trades made when the monthly, weekly and daily arrows are pointing in the same direction are the most profitable. This is not trading advice. Trade at your own risk.
ICEUS:KC1!
by Dinjin