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Coffee prices on watch with El Nino in the mix

  • Coffee output in India is forecast to rise after suffering a setback last year.
  • Higher production from the region could increase global supply to pressure prices after a drought in Brazil has had major impact on the coffee market.
  • Prices on bagged coffee has been increased by a wave of companies including J.M. Smucker and Kraft Foods.
  • Wholesale coffee prices still have a big wildcard in the mix with the emergence of El Nino.
  • Related stocks: SJM, KRFT, THI, SBUX, GMCR, MCD, JVA, KRFT, DNKN.
  • Related ETF: JO
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Comments (6)
  • mister-ugly
    , contributor
    Comments (248) | Send Message
     
    Most important the numbers from Brazil are still not validated. Accordingly when the "Cash," for immediate delivery price was High the selling of Peru Coffee and anything in storage was unloaded. However, JVA reported a huge gain in earnings up 186% though revenue was off. Suggesting "Cash," immediate buyers we're resisting present pricing. This suggests JVA is sitting on a stable stockpile of coffee with more earnings power going forward. If article above is validated then those having buying power are moving to India. This cannot last as a mix of quality coffee must be obtained. In Viet Nam with drought scenario much same as Central America & Brazil. Selling everything in storage for higher prices and not worrying about future contracts. Coffee has dropped in price as the price has been volatile. Until accurate numbers are reported shortly from Brazil anything goes. If the market has been infected worldwide with "RUST," or "COFFEE BORER," to any degree with droughts and EL NINO transparency will eventually rise. My opinion is JVA is undervalued.
    17 Jun 2014, 09:28 AM Reply Like
  • duhaus
    , contributor
    Comments (320) | Send Message
     
    " . . after a drought in Brazil has had major impact on the coffee market." Please review your "facts" before printing. This "major impact" has already been shown to be much less than all the "sky is falling" reports (i.e. JUST like this one) published previously had predicted. Why keep perpetuating false and misleading statements that have already been proven otherwise ?
    17 Jun 2014, 10:38 AM Reply Like
  • mister-ugly
    , contributor
    Comments (248) | Send Message
     
    Being in DENIAL of the truth is not a good investment tool. Therefore since only estimates on damage to crop in Brazil & Central & South America including Mexico it is wise to wait for accurate facts. Therefore I agree with this statement on India and believe the damage to Coffee going forward may adjust prices higher. Market seems to dis-agree with my opinion today. Obviously coffee futures are volatile and I have seen No accurate estimates of crop this year or damage to Viet Nam going forward which will be hard to determine in a communist country. So a wait and see attitude seems to be called for. I disagree that India will replenish market fully for coffee lovers.
    17 Jun 2014, 11:29 AM Reply Like
  • horseman
    , contributor
    Comments (219) | Send Message
     
    I agree that India may well "intend-to-increase" coffee production near term/seasonally; but the more astute AG climatologist have declared India to be a likely victim of the El Nino adversity to crops viz.a.viz monsoon disparity. And, the recent price futures softness for coffee is understandable and to be expected during this interim waiting period. I think it's a 60/40 or better bet at THIS moment that 4-6 mos. from now coffee prices will be substantially higher than today. Smart, astute buyers/vendors should be hedging protection against profit-robbing exorbitant prices this winter.
    18 Jun 2014, 03:22 AM Reply Like
  • markb
    , contributor
    Comments (509) | Send Message
     
    It was pouring rain at one of the World Cup matches the other day.
    17 Jun 2014, 12:42 PM Reply Like
  • mister-ugly
    , contributor
    Comments (248) | Send Message
     
    now the threat is El Nino & too much rain after drought did damage.
    17 Jun 2014, 01:55 PM Reply Like
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