Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
JK, I'm going to try to answer some of your questions according to the vision and a Brazilian coffee producer who also trades on the stock market:
1) There is much coffee left over from the past crop held by producers and exporters. The Brazilian Government has no more regulatory stock.
2) Current domestic prices do not adequately remunerate the activity, which causes producers to withhold coffee in the hope of better prices. Producers also avoid making future sales of their crops because they believe in better prices and do not want to consolidate this bad situation.
3) The situation is more critical in Colombia than in Brazil due to the large variation in the BRL / COP.
4) International stocks are well stocked, in a comfortable situation, as reported in this forum constantly.
5) The harvest of the Brazilian 2018/2019 harvest of Arabica coffee will be anticipated this year due to the good level of rainfall in the first quarter of this year. Probably in late May / early June.
6) Coffee from past crops loses its color and quality in the drink after one year. It will hardly be exported and will probably be used for domestic consumption.
7) The coffee producer is on a "dead end". If you sell the remaining coffee now, it consolidates a very bad bargain for your activity. If you wait longer to sell, you run the risk of having to sell at lower prices than you are currently doing. It is as we say here: "If you run the bug, if you stay the bug eats."
8) IMO, I do not see how prices can rise as many want. I do not see a trigger to trigger a consistent high like the one that occurred recently in cocoa. But I also do not believe in a much bigger drop in reais (KC x USDBRL = 385.00) as I have recently posted.
9) The political situation in Brazil is very complicated. We have presidential elections at the end of the year. Many politicians involved in acts of corruption. The economic situation can not be different. I believe in a more consistent devaluation of the real against the dollar. I think the level of 3,520 will soon be reached. At this dollar level and assuming the ratio (KC x USDBRL = 385.00) a constant, the price at ICE would be around 110.00 although I particularly do not believe in this price at the American Stock Exchange. The Brazilian real will be the "great player" in the coming IMO months.
JK, I hope you have clarified some of your doubts