Day Trading & Forex Forum

gisel101a

Other commodities had good reasons for failure in themselves due to the rapid recruitment of all the world and a demand for all positions of fleeing assets in general, coffee is benefiting from increased use home (because Starbucks was a bit too expensive) encouraged by the stress that accompanies a healthy fear of financial ruin and the difficult times ahead.

What about your idea??

london88

Not quite sure I understand!

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ahardy66

I think the OP is talking coffee fundamentals.

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Adam

elitejets

Coffee is one of the commodities that has relatively steady demand side fundamentals. Whether you drink it at home or Starbucks people who drink coffee will still drink coffee. Coffee demand has been relatively stable for many years, increasing at less than 1% per year.
The market is therefore affected by supply side fundamentals. Brazil is the worlds largest producer of coffee (1/3 of all production and the largest traded on the ICE exchange). 2006 was a good year, 2007 was a poor one for Brazil resulting in prices 15% higher than preharvest. The big story is the 2008 crop which is predicted to be a big one resulting in more supply than demand.
You can be pretty sure that coffee traders and the market are very well aware of this.
I would not be going long coffee because more people are drinking at home any time soon.
If you don't understand the fundamentals then trade the price action on the charts!
Nicola

rawrschach

what she said

metals_trader

coffee in the last i would say 5 years has taken off in trading but it is and always will be larger on the physical trading side, by big commodity houses such as glencore. Derivatives wise it is mostly used for hedging the physical positions.