This Could Be A Game Changer
It is time to take a keen interest in the coffee futures market, this is one commodity you should keep aneye on. Coffee is a commodity that has been faced with supply issues since 2015 there were some really dramatic price increases back then. In October 2016, Coffee futures traded 175.40c/lb before hitting the floor last month. In 2016 harvest figures for Columbia show a 9% decline in yield from the previous year, local prices in Brazil are quite high and the market is expecting a poor harvest in Honduras all this could further increase the price of the commodity. There is a strong chance that the 110.00c/lb floor will hold, if this is the case, then this has to be a rebound of that critical floor, it won’t be long before we are back up to those critical 150.00c/lb highs if we are right.
Coffee futures tend to correlate strongly with the Brazilian Real, so watch any movements on that currency. A move in coffee futures could signal a recovery in the entire commodity market space. We have already seen some movement in Oil prices and Copper prices. However the dramatic move on commodities this week during the NFP is a sign. Robusta Coffee futures had a dramatic fall on Thursday, so something is clearly afoot. We will have to wait and see.