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Can Coffee's Future Brew a Global Economic Storm?In the high-stakes world of global commodities, coffee has emerged as an unexpected harbinger of economic complexity, revealing how climate volatility can transform a morning ritual into a geopolitical and financial chess game. The current market is experiencing unprecedented turbulence, with Arabica coffee prices surging over 80% in 2024, shattering decades-old records and signaling a profound disruption in one of the world's most beloved agricultural products. This dramatic price escalation is not merely a statistical anomaly, but a stark illustration of interconnected global systems under extreme stress. Brazil and Vietnam, the twin titans of coffee production, have been ravaged by climatic extremes—from the most severe drought in 70 years to unpredictable rainfall patterns—creating a perfect storm that threatens not just coffee supplies, but exposes the fragile underbelly of global agricultural supply chains. Leading traders like Volcafe are projecting an unprecedented fifth consecutive year of supply deficits, a scenario that challenges traditional market resilience and demands innovative strategic responses. Beyond the immediate economic implications, this coffee crisis represents a microcosm of broader challenges facing our increasingly complex and climate-vulnerable global economic ecosystem. As major manufacturers like Nestlé begin to signal potential price increases and package reductions, consumers and businesses alike are forced to confront a fundamental question: How do we build sustainable, adaptable systems in an era of escalating environmental uncertainty? The coffee market's current volatility is not just about a potential price hike in your morning brew, but a compelling narrative about resilience, adaptation, and the intricate dance between human enterprise and natural systems. For the astute observer and strategic thinker, this coffee market disruption offers a compelling lens through which to examine broader economic trends. It underscores the critical importance of diversification, technological innovation, and proactive risk management in an era where climate change is no longer a distant threat, but an immediate and transformative economic reality. The story of coffee in 2024 is more than a commodity report—it's a provocative invitation to reimagine our understanding of global economic interdependence.
ICEUS:KC1!Long
by signalmastermind
Coffee Is Getting ExpensiveCoffee is in a massive rally on tight Brazil crop fears and if we take a look at the weekly chart, we can see it trading impulsively higher with space for more gains until it fully completes a five-wave bullish cycle by Elliott wave theory, just watch out on short-term 4th wave pullbacks. Basic Impulsive Bullish Pattern shows that Coffee can be trading in subwave "iii" of 3 of (3) of a five-wave bullish impulse of different degrees, so more gains can be seen after short-term 4th wave pullback.
PEPPERSTONE:COFFEELong
by ew-forecast
The Enigma of Robusta: Why is Coffee's Unsung Hero So Valuable?Robusta coffee, a resilient and versatile bean, has played a pivotal role in the global coffee market. Despite its often overlooked status, Robusta has experienced a significant surge in value in recent years. This article explores the factors driving the rising prices of Robusta coffee, including increased demand, supply chain disruptions, and climate change. By understanding the challenges and opportunities facing Robusta, we can better appreciate its enduring significance in the global coffee industry. Introduction The global coffee market has witnessed a steady rise in demand, leading to a corresponding increase in prices for both Arabica and Robusta beans. While Arabica often takes center stage, Robusta, a less celebrated but equally essential bean, has also experienced a notable appreciation in value. This article delves into the reasons behind Robusta's ascent, examining the factors that have contributed to its growing prominence. Factors Driving Robusta Coffee Prices Several key factors have converged to push Robusta coffee prices upward: Increased Demand: The global appetite for coffee has expanded significantly, particularly in emerging markets. This rising demand, coupled with a limited supply, has created upward pressure on prices. Supply Chain Disruptions: Weather-related challenges, geopolitical tensions, and logistical constraints have disrupted supply chains, leading to shortages and higher costs. Climate Change: Climate change has exacerbated weather-related events, such as droughts and floods, impacting coffee production and driving up prices. Shifting Cultivation Patterns: Some farmers have shifted their focus to more profitable crops, reducing the overall supply of Robusta coffee. The Enduring Value of Robusta Despite the challenges it faces, Robusta Coffee continues to hold significant value. Its resilience, versatility, and unique flavor profile make it a sought-after commodity. As a cornerstone of the global coffee market, Robusta plays a crucial role in meeting consumer demand and supporting the livelihoods of millions of farmers. Conclusion The rising prices of Robusta coffee can be attributed to a combination of factors, including increased demand, supply chain disruptions, and climate change. While the future of coffee production faces challenges, Robusta's enduring value and adaptability position it as a resilient force in the global coffee market. By understanding the factors driving price increases and exploring innovative solutions, we can ensure the continued sustainability and enjoyment of this beloved beverage.
ICEEUR:RC1!Long
by signalmastermind
Starbucks: Brewing Long-Term Success Amid Short-Term ChallengesTrading at 23.4% below our estimate of its fair value Earnings are forecast to grow 9.78% per year Earnings have grown 10.8% per year over the past 5 years Pays a reliable dividend of 3.04% Starbucks Corporation's recent earnings report might have raised some concerns, but there are several reasons to remain optimistic about SBUX stock. Despite a challenging quarter, Starbucks is strategically investing in digital innovation and expanding its global footprint, positioning itself for long-term gains. The company's focus on sustainability and enhancing customer experience highlights its commitment to quality. Moreover, Starbucks' diverse product offerings and loyalty programs provide a solid foundation for future growth. With strategic cost-cutting measures and a strong financial position, Starbucks is poised to rebound and deliver value to its investors.
NASDAQ:SBUXLong
by Maximus20000
NESN - Nestlé - NSRGYTrading at 42.9% below our estimate of its fair value Earnings are forecast to grow 6.49% per year Earnings grew by 15.8% over the past year Pays a reliable dividend of 3.44% NSN stock has been consistently outperforming expectations, showcasing impressive growth and stability. With strong financials and innovative strategies, it’s a smart investment choice for long-term gains. Highly recommended! 🙃🙃🙃🙃 I don't want to talk about all the scandals Nestle has been involved in over the past few weeks.
SIX:NESNLong
by Maximus20000
Coffee Futures: Bearish Confluence Indicates Potential Short PosIn the coffee futures market, recent analysis reveals a significant bearish outlook. The Commitment of Traders (COT) report indicates that commercial traders are holding major short positions. Additionally, seasonal patterns suggest a tendency for bearish momentum during this time of the year, further reinforcing the downtrend. Technical Analysis and Confluences Supply Area and Fibonacci Levels: Price Action: The price has reached a key supply area, suggesting a potential retest and subsequent decline. Fibonacci Confluences: Various Fibonacci retracement levels align with this supply area, adding strength to the bearish case. Momentum Indicators: Overbought Conditions: On the H4 timeframe, momentum indicators such as the RSI show that the market is currently in overbought territory. This typically precedes a price correction or reversal. Seasonal Trends: Historical data indicates that coffee futures often experience bearish pressure during this period. This seasonality aligns with the current technical setup, suggesting that the market could follow its usual pattern of decline. COT Report Insights: The COT report underscores that commercial traders, often considered the "smart money," are heavily short. This position by commercial traders can be interpreted as a strong bearish signal, given their historical accuracy in forecasting market movements. Trading Strategy Given the combination of a bearish COT report, seasonal trends, and technical indicators showing overbought conditions and resistance at the supply area, we are considering opening a short position in coffee futures. Key Points for the Short Position: Entry Point: Around the current supply area, taking into account Fibonacci retracement levels. Stop Loss: Just above the supply area to manage risk. Target: Based on historical support levels and previous price actions, aiming for a significant downward move in line with seasonal and COT report signals. By aligning our strategy with these confluences, we aim to capitalize on the anticipated bearish momentum in the coffee futures market.
ICEUS:KC1!Short
by FOREXN1
2
ICE EU:RC Robusta Coffee forecast, Buy, Target 1995 (+45.73%)Robusta Coffee Futures (ICE EU: RC) Trade : Buy Entry : 1369 Target : 1995 (626, +45.73%) Stop : 1290 (-79, -5.77%) Posted on Sunday, December 27, 2020 Note : Coffee prices are likely to rise. The price flow is very stable. It seems that someone is managing the price well. If my prediction is right, resistances (targets) could be 1627 and 2007. Support could be 1290. If they break out 2110 and secure that line, there will be a high possibility of a very big move. As said many times, commodity prices will rise very high in 2021-2025, and coffee will be one of them.
ICEEUR:RC1!Long
by Ptrade
1
Not So Little Brother ? NYSE:BROS +3.85%on 05/06/24 is a powerful contender for Starbucks customers. Living in southern California, I've started seeing DutchBros popping up around town (are they any good?). One thing for sure they've gotten right is their amplified focus on delivering the best customer experience. One thing that the NASDAQ:SBUX Starbucks former CEO Howard Schultz asked his former company to refocus on. It's so good that Tiktokers started making videos poking fun at the friendly nature of the Dutchbros employees. With all of that being said, it's working for them and very well. They've opened 159 new shops in 2023, and according to Placer.AI, "While the growth of Starbucks' foot traffic has been shrinking since last year, Dutch Bros' growth in traffic has been accelerating." also, Earnest Analytics reports, Dutch Bros. accounted for 6% of U.S. consumer spending on coffee and other premium drinks. Up from 4% at the end of 2020. Last year's revenue was up about 31% This is my Strategy: Using Bollinger Bands and Fibonacci Retracement, we see increased trade volume and volatility as the price rises above the SMA and towards the upper band. The price is currently $28.34. We can expect it to reach a price target of $31.16 (test strategy here) before retracement or reversal, as the shares may be near overbought status. This will give us a $2.82 profit per share. If sold Enter at price targets: $27.33 (low) and $29.92 (max) Hold for the price to cross $32.90 for uptrend confirmation. (FYI, analyst target maintains $33.00/share) It is one of my favorite stocks, and I'll watch its performance closely this year.
NYSE:BROSLong
by eakosah
Something Brewing? NASDAQ:SBUX Has had a tough week (dropping -17.7%), topped with a demand from the former CEO Howard Schultz to shift focus from the current data-driven business model to a customer-centric business. With the above being said, I believe the coffee giant will recover amid rising competition from Dtchbros $NYSE: BROS and Dunkin Donuts $FINRA: DNKN_SHORT_VOLUME. This is my strategy: Using Bollinger Bands and Fibonacci Retracement, we see a large trade volume and volatility increase as the price drops below the SMA and lower band. The price is currently $73.11. We can expect it to reach a price target of $84.68 (test strategy here) before retracement or reversal, as the shares may be near overbought status. This will give us a nice $11.50 profit per share. Enter at price targets: $70.31 and $72.92 Hold for the price to cross $87.46 for uptrend confirmation.
NASDAQ:SBUXLong
by eakosah
Buy Coffee Day Enterprises LtdCoffee Day Enterprises Ltd. which runs cafe chain with brand name Cafe coffee day is trading at a current price of 53.2 rupees but it's book value is 146. Its around 2.744 times book value. The company is running and generating profit even after the death of its founder years back. It shows that the management of the company is keen to take the company to new heights. Hope you love my analysis. Please invest after your own analysis. Do like and follow. Thank you.
NSE:COFFEEDAYLong
by ronak16125
Have you had your coffee yet?We already know that coffee beans have always been one of the most traded commodities in the world, specifically second, so why the sudden interest again? Figure 1: Summary of World Coffee In recent years, global consumption has increased at a higher rate than production due to pent-up demand. This rather large deficit in balance in the past two years puts the coffee market in an interesting spotlight. Nonetheless, arabica beans continue to be the more favored selection, with South America as the central production region, driven mainly by Brazil. Gaining Access to This Market Amongst various coffee derivatives, a coffee futures contract is the most common way to trade coffee. The 4/5 Arabica Coffee Futures (ICF) listed by Brasil, Bolsa, Balcão (B3) Exchange is an example of such contracts. For those unfamiliar with futures contracts, it is a legal agreement to buy or sell a specified asset at a predetermined price for delivery at a specified time in the future. For the ICF contract, the asset is 100 bags of 60 kilograms filled with grade 4-25 or better Arabica coffee bean produced in Brazil that is meant to be delivered in the city of São Paulo, Brazil, or a B3 accredited warehouse. The ICO’s Grading and Classification of Green Coffee states that “coffees of the highest altitudes are denser and larger in size than those produced at lower altitudes.” Loosely speaking, larger beans with higher density are better. The grade indicators refer to the number of defects found in a 300g sample. To achieve a 4-25 grade, the coffee must be classified by B3 in accordance with its rules and regulations. This grading system is more specific to Brazil-produced beans. Other coffee-producing countries have other specifications and classifications. The Trampoline Effect Figure 2: Supply & Demand Factors Historically, the ICF future prices resemble that of a trampoline, with major support lines at the 124.55 and 103.60 levels. Let us explore some of the factors that caused these jumps previously; bear in mind that consumption of Arabica beans has been steadily increasing since the 1990s. S1: Poor weather conditions in South America in 2010 Brazil suffered from poor weather conditions and faced significant problems in meeting the expected crop yield. Large producers were also considering hoarding their stocks. The problem was further exacerbated by the backdrop of record low arabica stock levels since the 1960s. S2: Drought in Brazil in 2014 Similarly, poor weather conditions caused uncertainty in crop production for the harvest year and pushed prices up. S3: Drought and frost in Brazil 2021 The effects of drought followed by a severe wave of frost in Brazil wiped out its coffee production. This was accompanied by increased freight costs and shipment issues caused by Covid-19. S4: Harvest Conditions Evidently, weather conditions pose significant downside risks to the coffee supply. Moreover, occasional coffee leaf rust coupled with increasing demand has caused spikes in coffee prices. USD and Coffee Figure 3: ICF and DXY (Inverted) As with many commodities, coffee tends to move inversely with USD. This is especially so since most coffee contracts, like the ICF, are priced in USD. When the dollar rises, coffee becomes more expensive in non-USD terms and can cause international demand to fall, and vice versa. Figure 4: ICF and BRLUSD This relationship becomes more apparent when compared to BRLUSD. Our thought process: Local Brazilian producers and manufacturers traded these ICF contracts as a hedging tool. During the physical delivery of the beans, these market participants would then have to do a currency exchange. Consequently, the impact of BRLUSD rates would have a larger impact on them. Similar Coffee Futures Contract Figure 5: ICF and KC The two contacts’ underlying assets - arabica beans - have similar grading standards. Consequently, macroeconomic factors are likely to have similar impacts on the two contract prices. The prices between the two contracts exhibit a very strong positive correlation. We can then create a spread with ICF – Coffee C (KC) Futures Contract. Figure 6: ICF - KC ICF is quoted USD per bag for a contract size of 100 60kg bags, while KC is quoted USD cents per pound for a contract size of 37,500 lbs. We can then create a spread with ICF1!/60-KC1!/0.4536/100, by converting both contracts to the same base units. The spread setup indicates that KC generally trades at a premium compared to ICF. This could be attributed to several factors, a notable one being the higher liquidity preference investors tend to have for the KC contract, which might reflect a broader international preference. It is also worth noting that ICF requires Brazil-produced arabica beans, while KC comprises beans from other countries. This could explain the uncanny coincidence between the upside bias in spread movements (Figure 6) occurring in periods identified in Figure 2 – supply-side factors driven mainly from the Brazil side. Putting into Practice Enough has been said about coffee; you must be wondering how we then use this information to set up trades. Here are some ways for consideration. Case Study 1: Directional Driven By considering current macroeconomic factors on coffee, to express a “quieter” outlook on coffee, an investor could sell the ICF future contract (ICFH4). At the present level of 206.00, with a stop-loss above 219.00 – a conservative resistant line – it brings us a hypothetical maximum loss of 219.00-206.00 = 13.00 points. As shown in Figure 2, if ICF1! Reverts to major support line 124.55, a hypothetical gain of 206.00-124.55=81.45 points. Each ICF futures contract represents 100 bags; the value of each point move is USD100. However, as we approach the main harvest period for Brazil, May to Sep, it is of paramount importance for the investor to keep a watch for any potential hiccups that could negatively affect the harvest yield. Furthermore, this is likely to be a medium-term macro-driven strategy. Case Study 2: Spread Driven Regarding the ICF-KC spread currently trading at the upper bound, an investor with a bearish short-term view that the spread will trend downwards could sell ICF futures contract (ICFH4) and buy KC futures contracts (KCH4). At the present level of 206.00 and 169.95 for ICFH4 and KCH4, respectively. Following the formula above, the spread will be at –0.31336 points. Setting the resistance at the Fibonacci 50% ratio, we have a stop loss at -0.25, which brings us a hypothetical maximum loss of -0.25-(-0.31336) = 0.06336 points. Setting the support at the Fibonacci 38.2% ratio, we set our take profit at -0.40, which brings us a hypothetical gain of -0.31336-(-0.40) = 0.08664 points. The value of each point move in ICFH4 is USD100, while KCH4 is USD375. Conclusion There are various methods to create opportunities for investors, depending on how the investor would like to view the market or what other financial assets to pair up with coffee futures contracts. What we have covered in this article merely scrapes the tip of the iceberg, and we hope investors keep a creative mindset and explore other potential options. Disclaimer: The contents of this article are intended for information purposes only and do not constitute investment recommendations or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description.
BMFBOVESPA:ICF1!Short
by inspirante
10