Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Watching the Weather Good Stress, Bad Stress
There is a fine line when it comes to the weather and when a plant can tolerate dry weather or not. Many factors come into play, including the soil moisture level from prior rains, the temperature, whether there is irrigation and how crops were even fertilized.
For trees, the age of tree is also important because older trees have deeper root systems to tap into to sustain its health. But the concept of a tree needing stress is oftentimes lost on traders.
For example, during the floral bud stage, a tree should be without rain for 30-60 days to create the stress and give the trees stored energy as during this period it is dormant.
When rains come, the stressed trees can burst forth with flowers as these buds open. Sufficient rain and follow-up rain is necessary to have the flowers open and then fix to be able to produce the crop. The coffee market has a tendency to run higher on the first flash of dry weather or talk of stressed coffee trees, but some stress is essential to have a good crop. Without stress, the potential size of production is reduced. It is the opposite of what traders react to.
However, there comes a point where the days without rain becomes too great and the tree starts to suffer, with leaves that are not only curled but starting to brown or defoliate.
The floral buds can turn brown and wither. It is actually better though for the tree to not receive rain then to be teased out of dormancy with small amount of precipitation that are just barely enough to induce flowering and then turn try again.
This is the worst-case scenario for flowering and one that is happening in some areas of Minas Gerais, the key Arabica producing state in Brazil.
While not all areas are under water deficit, some are and this is already expected to reduce the next crop’s potential. It was expected that Brazil could have produced a record setting crop, but that now seems to be out of question.
Coffee prices pulled back sharply when the rains started to fall, but conditions quickly dried out again. As of this writing, weather forecasts are showing warmer than normal temperatures over about 70% of the coffee belt and will cause faster evaporation. The rain event that did occur was a false start to the rainy season induced by a cold front rather than the beginning of Brazil’s monsoon season where rains fall on a steady basis and help to support the fixing of the blossom for about a 60-day window and then they ultimately become the spot for the fruit to start to form.
The current situation is very different than the 1985 drought. During that time, the rains never started until it was too late.
The crop was sharply reduced and trees also died. The drought period a few years ago was during January and February, so also at a different stage in the crops development. The dry weather then was after the flowering and the fruit set. It is also a period of the strongest vegetative growth of the tree, where the branches expand to form new nodes where flowering will ultimately take place.
A tree does not flower in the same spot twice. The situation in Brazil bears carefully monitoring.
There is only a small window for the rains to come and spare the crop from greater harm.