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US Coffee C Futures - May 24 (KCK4)

Currency in USD

US Coffee C Futures Discussions

Gap filled 😉
MGom floods ICE with new bag deliveries. The biggest weather risk is over for now. FND when the spread reached $10 in backwardation is also behind us. It is possible that a time of price weakness lies ahead. I'll wait to take a long position until MGom stops sending new bags, we'll be closer to the freezing season and I'll see a pinbar on the chart.
waiting around seventy two for positional shopping
182 then buy
now !
Looks like it's still headed down
yes better get out of it 2 times failed to go up maybe next try around 175
StoneX forecasting 24/25 Brazil harvest at 67 million bags
The highest prediction from this agent in last 11 years, including prediction greater than 20/21.
4 years ago global consumption was 10% lower, and 11 years ago it was 30% lower. So such numbers about production are hardly impressive.
KDP just reported lower coffee sales.
Pending bags ICE, today are 160k bags
Feb 24’ exports on pace to surpass Feb 21’ record high.
MGom finally your beans start to arrive to ICE at better pace. 👍
They take a while, but they are coming. However, quality is compromising the increase in ICE certificates at greater speed.
Whats going on
How do you guys like diffs report?
SÃO PAULO (Reuters) – Brazil's coffee harvest in the 2024/25 season, whose harvest begins in the coming months, was estimated this Friday at 69.4 million 60 kg bags, an increase of 4.6% in comparison with the previous season, following an improvement in the climate in the Arabica grain production region, according to a report from Itaú BBA
The market has changed, as well as the sales channels, we already had a discussion about it here.
Modern at home channels consume much less beans. Higher $ sales from at home channel does not mean more beans.
There is much higher risk than recession - more global and wider war(s), weather anomalies, etc. General public will not be saving 1USD/EURO on coffee (cheapest antidepressant so far :)), a specially, if climate will turn towards longer colder winters - it was never the case in the past, if to talk consumption but not specs trimming positions during stock market crush, etc. Recent data does not support the theory re closing biannual gap for A. Nobody knows what new cultivars will provide in the future but currently, USDA and CONAB data show the gap exists. :) USDA projection of ending stock for 23/24 was 2.7mb, assuming 44mb of export plus 23mb of domestic, 66.4 production - 67 = - 0.6mb + 2.7mb = 2.1mb = 2mb would be beginning stocks for 24/25. Assuming 67/68mb for 24/25 and 72mb of production, ending stocks (paper:)) for 24/25 look like 2mb + 4/5mb = 6/7mb but it remains to be seen, and other origins performance will matter as 3mb added to global consumption in 24/25. As MGom confirmed, premature harvesting is expected and some beans may come being lower quality, etc. There is no problem to export lower quality to roasters but ICE may not take it :), etc... Ending stocks in Brazil about 5mb do not play significant role now, figure should be more around 10 - 12mb to relax the market...
After days of unstable weather, the rain is expected to continue throughout the weekend across Brazil. According to the National Institute of Meteorology (INMET), the largest accumulated volumes should be recorded in the Southeast, mainly between the north coast of São Paulo and the Metropolitan Region of Rio de Janeiro.
And somehow coffee is green again. New bags at ICE, better weather and nothing helps to push price lower. Why?
Let's see how the market behaved after the FND, including whether the Brazil 24/25 harvest forecast from different agents will have any impact on prices.
EU coffee stocks/commercial warehouses are empty because of high cost of backwardation and high financing interest rates (up to 7%). Biggest trading houses do only back to back sale and that is where the coffee as per big export numbers from origin dissapier. How long can trading houses to such business is uncertain because in back to back business there is very low profit.
Some business went to medium/small rosters. Internet and Amazon, etc made it trick. B&M do not own the same market share as before.
*** its trick :)
What is interesting is, that after bancruptcy of Mercon, insolvency of Volcafe/ED & F. MAN...there are rumours of another 2-3 biggest trading houses are in trouble...possible insolvancy/bankruptcy. Does anybody has more reliable info on who these are ?
It did happen Mercon filed Chap.11 Volcafe seems soon Some other in similar position...
i mean bigger companies than them
Mercon was globally no 5-6 and Volcafe no. 3-4. How much bigger then them ?
But again, weakness has nothing to do with rain but with nearing FND
But again, FND with while backwardation is not bearish rather opposite. ;)
Dont rely on it (BW), nothing is at usual neither my point
Inmet threatens with a lot of rains for Triangulo and SDM :) (as it was predicted for Feb). MAM period is gonna be the one to watch :) - if drier weather will come and if yes - for how long. Until USDA annual report guesses will be mostly in the range 72 - 74mb, with R about 23/24mb... KC has to survive within 160 - 200 till frost season... :) :) :)
From today on its not going to rain, it will HEAVY rain in the CB for next seven days. Check the forecasts.
So yesterday it was going to rain, today, not anymore? Righto.
I would rather say FND Mar24 next week and not coffee arrival at ICE are decreasing the market level
FND while backwardation market is not a bearish event.
200 remains important level as 140 - 200 important range. If to look at weekly, in all previous big spike cases, after reversing and bouncing from 140 - 150 level, KC was going down in a more pronounced manner. Now it has established a trading range. It doesn't guarantee anything :) at all, but in relation to all previous cases it is kinda anomaly :). It's not business as usual, at least till now. For July contract for all 3 daily, weekly and monthly charts the cluster 165 - 175 (a specially 165 - 170) correlates with FIB 61.8 and other important supports as a middle of the trading channel (140 - 200).
And the coffees keep arriving at ICE, pending bags up again.
Armada is docking :) :) :) ?
165 - 170 cluster would be a perfect :) retracement on both daily and weekly...
indicies falling usd getting stronger so coffee also dump ?
i see possible 10 dollars down would be great buy it after fall again
Spreads are strong and rising. This is not bearish.
well lets try buy here some and lets see :)
Some consumption news from Asia (open sources :)): 1) the segment of branded coffee shop market in Asia (food focused) grew by outlets (coffee shops) for 24% within 2023 and reached 119221 stores for Dec, 2023; 6 out of 10 largest markets achieved double digits outlets growth; 2)China - roughly 49.7k outlets, Korea - 31.13k; 3) Thailand - 8.353k ---- 3 largest markets; 3) there were surveyed 18 main East Asian markets - all reported rising sales. Claimed average for Americano price China+Korea+Thailand+Japan/4 = $2.70 :). Also, in October 2023 global coffee market was projected to grow from roughly 39bil $ in 2022 (Dec) to 51bil$ in 2028, Cagr about 4.7%. Global projections may not materialize of course :), but retail stores have been physically opened in Asia (some may get closed though :) :) )...
Open sources: Online coffee sales projected to reach $13.6 billion by 2027, cagr of roughly 12% from 2021 to 2027. Asia-Pacific - fastest growing market for online sales, cagr 15% from 2021 to 2027. Online sales in US (largest market) reached $3.7 billion, growth roughly 55% vs previous year. Thus, big names loosing some market share in brick and mortar should not surprise (besides many chains switched to privet labels years ago :)). Google search trend buy coffee online reached ATH in 2023 after previous high, made during COVID. Those are open sources, but it doesn't look depressive for consumption... :) Small and medium-sized brands now make up 55-65% of coffee sales on Amazon, surpassing larger companies like Starbucks (11-13%) and Lavazza (8-15%).
India: coffee market size in 2023 about $1.8 billion, projected in 2030 - $2.4billion, cagr about 4.3%, India was one of the fastest growing market for Nestle (by Nestle May 2023). Some studies project cagr about 9% for Indian coffee market til 2032... Indian coffee shops market is growing in terms of local and international brands. By some studies: China coffee outlets grew 58% in 2023 vs 2022 (!), Malaysia grew 28%, Philippines grew 15%.. 31 out of Europe's 40 largest branded coffee shops markets added outlets within 2023, total market grew 3.3% to exceed 42800 outlets, Romania grew 29%. Germany, Sweden, Norway, Finland contracted by outlets (!). Projection for 2024 - EU market will reach 44100 outlets with UK reaching 10200 stores (vs 9800).
Conclusions out of this ? For sure, some changes may occur on the way, but it doesn't look like expectation for a depression within coffee market. Growth in India and Indonesia is also important as it will reduce export meaningfully, unless production will grow intact. Currently, production in India and Indonesia can be called stagnant at best. (Indonesia was about 2mb 23/24 for R). Veitnam was revised by POST for both 22/23 and 23/24. It may improve, but most likely to previous 30mb or so... Indonesia is stagnant, etc. Data from above (open sources ! :)) point to the fact, that consumption and its projection are doing OK, otherwise why opening new stores ??? Thus, 3mb added annually to consumption side of the equation doesn't seem that wrong :). Brazil is the only coffee monster in the room (at least for now :) :) :) ). Brazil is most technological and advanced producer without any doubts, as people try to forecast droughts in MG for next 100 years :). But the situation when one producer/supplier controls roughly 40 - 45% of global market can't be called safe from whatever perspective. What was seen with Cocoa, OJ, etc...
Guys I need answer why KC is up? Great Brazil export. Some new bags in grading queue too, yet price is up and spreads even more! Why?
The market for now remains firm.
Mgom, coffee is a weather market. I think that being biased in on direction for 2 years despite changeable weather is not very wise. You are bearish all the way from 150 area. Despite heat wave, despite small than projected deliveries to the ICE. I have to admit, you are not the only one :) I prefer to change my opinion according to collected new data. For example during the weekend long term weather forecast improved a lot.
150 no, since 240.
Its warm and dry in Brazil apparently ! Well what is it supposed to be in mid of SUMMER - snowing, freezing or ice ? Nonsense getting bigger and bigger. And in Austria its warmer now then in July. What a rubb....ish !
What you say is correct, yet there are quite different summers, Is it normal for you to warmer than in July?
The one that wrote (w-guy :)) knows for sure as he's following extreme temps all over the world and uses for that verified info from the stations but not the computer models. He deals with the events post factum only...
It could be a specific spot in the specific valley, there was no talk about whole Austria blossoming now :)... His main point was that degree of anomalies world wide is very high .
Another bad grading today at ICE, majority of bags rejected.
In the twitter of one w-guy I saw the weather forecast, pointing to very hot March, April, May for main parts of both Americas, Africa, part of Asia... I was not able to define what model he referred to and this is just one of the models and just probability for sure (!) and it may not get realized or not to critical extent, etc. But continuing temperature records point to the fact that not all normal with the weather... :) For instance, I saw comment on current temp somewhere in Austria being higher than July average for that place :)...
Re percentage of failed bags: would the one who knows ICE rules and that they got much stricter since some point in terms of old coffee, etc, continue to send bags knowing that 40-50% will get rejected ? Does it have any sense for the sender unless the goal is to show the flow ? :)
GFS model from second part of February is very dry and hot indeed. For at least 3 weeks. This is forecast for now and can change of course.
Cocoa again had a good advance today :) , probably :), in relation to temps in IC and Ghana :). Since Jan ( for March contract) total advance is about 50% and on monthly chart slow stoch is overbought and currently making a third top (there were no 4 tops on slow stoch while being overbought for monthly chart never since 1959). At some point it will reverse and crash for sure, just the point is not known as of yet... Cocoa is not KC but it gives a clue what may happen to KC if similar conditions will take place... A funny thing is that if to build longest monthly charts for Cocoa and KC, a lot of similarities will be seen since 2017 for Cocoa (cyclical low) and 2019 for KC (cyclical low). If to suppose that Cocoa is 2 years ahead of KC somehow :), 2026 or so has to be the one... (2026 should mark real start of global cooling so, possibly, more weather anomalies/disasters as more eruptions, etc have been predicted for/since that year). This is all abstract guessing :) for now :), as Brazil is not Africa climate, landscape, etc wise but who knows... :)
Cocoa illustrates very well that when something happens at higher base (at 4000 of this Jan) - it looks a bit different than otherwise... :) Cocoa produced ATH, previous one was made in ... 1977 :).
Slow stoch for monthly NG chart is in the making of second low. Dropping all the fundamentals in favor of higher NG prices ahead, there was no case of 3 oversold lows for slow stoch (monthly) for NG never. It may test lower levels without any problem, but what may come after can surprise a lot !!! :) And ferts and chemicals will get affected, without any doubts at all. Currently , monthly NG chart reminds 2002 and 2020. What was next is known... :)
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