(KCK24) (KCN24) (KCZ24) (RMK24) (RMN24) (RMX24)
"How a lingering El Niño & Climate Change are creating a new bull market in coffee futures"
by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter
- Thursday Evening Report - April 11, 2024
There’s a new bull market in town other than cocoa, gold, silver and most recently crude oil (Middle East tensions and stronger global demand). It is coffee. Our WeatherWealth newsletter https://www.bestweatherinc.com/membership-sign-up/ advised clients close to a month ago about a potential severe drought developing for Robusta Vietnam crop regions (similar to the lingering spring El Niño conditions in 2016).
In contrast to other firms suggesting La Niña will form this summer, we have disagreed. In fact, some computer models just came out agreeing with our feeling that occasional weak El Niño conditions will persist until at least June or July.
So… how does that influence global coffee weather? For one thing, it may turn too wet for parts of northern Brazil's coffee, following earlier heat and dryness in December-January. This was related
not only to El Niño, but to deforestation in the Amazon.
However, of even greater concern is the continuation of unprecedented tight supplies in Robusta coffee. Irrigation levels are extremely low. Combine this with near record April heat (map below) and a pesky high pressure ridge, and one can see why Robusta prices are testing historic high levels.
Consequently, will I change my forecast to more rains and a bearish outlook? How does one use coffee spreads, futures or options to potentially capitalize on the lingering El Niño? That is where WeatherWealth comes in. Please feel free to click on the link at the top of the page for a 2 week free trial period covering all Ag and natural gas markets. You will also receive my BestWeather Spiders with trade sentiment for a dozen commodity products… for example:
Enjoy,
Jim Roemer
www.bestweatherinc.com
Thanks for your interest in commodity weather, and…
Have a great weekend!
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.
On the date of publication, Jim Roemer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Disclosure Policy here.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
