iPath Dow Jones-UBS Coffee ETN
 (JO)

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  • Dec. 29, 2015, 5:28 PM
    • Coffee prices continue to fall as strong El Nino rains in Brazil help to boost crop yields. The next harvest in the nation is forecast to be up 20% Y/Y at 58M bags.
    • Even with Arabica prices down 28% this year, analysts see another swing lower for coffee in 2016 due to the oversupply situation.
    • Weak currencies in South America are also providing a strong incentive to local producers to sell as much as they can.
    • The trend toward low coffee prices is helping to lift margins for many coffee sellers with U.S. retail prices only down 4% to 5% this year. Companies light on hedging positions are seeing the biggest benefit.
    • Most execs play coy over the bottom line benefit of lower coffee commodity prices, but even Starbucks CFO Scott Maw had to concede that pricing looked a "little bit favorable" during the firm's last earnings call (transcript).
    • Coffee futures chart
    • Related stocks and ETFs: KHC, GMCR, DNKN, OTCPK:RBGLY, OTCPK:RBGPF, SBUX, OTCQB:JAMN, SJM, MCD, JO, CAFE, THS, KKD, OTCPK:NSRGY, OTCPK:NSRGF.
    | Dec. 29, 2015, 5:28 PM | 16 Comments
  • Dec. 9, 2015, 3:15 AM
    • The steady drip of additions to JAB Holding's coffee empire, most recently Keurig Green Mountain, is threatening to leave a bitter taste for traders who supply its growing network of roasters with beans.
    • After being purchased by JAB, many roasters have increased their net financing terms to 120 days or more, up from an industry standard of 30 days, meaning that middlemen have to wait at least four months before being paid.
    • Such a move poses problems and gives importers a choice between paying more in interest payments on the additional credit, or losing the roaster as a customer.
    • ETFs: JO, CAFE
    | Dec. 9, 2015, 3:15 AM | 1 Comment
  • May 14, 2015, 11:05 AM
    • The National Weather Service forecasts a continuation of El Nino conditions in the Pacific Ocean late into the year.
    • The outlook is consistent with a recent statement from across the ocean by the Japanese Meteorological Agency.
    • In the past, El Nino conditions have contributed to drought conditions in Central and South America to impact coffee costs for sellers.
    • Related stocks: GMCR, SBUX, JVA, SJM, KRFT, DNKN, OTCQB:JAMN.
    • Related ETFs: JO
    • El Nino Advisory (.pdf)
    | May 14, 2015, 11:05 AM | 24 Comments
  • Mar. 2, 2015, 2:34 PM
    • Coffee prices are in retreat as extended rain in Brazil and increased production capacity has helped to soothe the market and push up forecasts on output.
    • Data from the U.S. Commodity Futures Trading Commission indicates a sharp drop in bullish bets on coffee as experts now ease off some previous concerns on supply vs. demand.
    • Arabica prices are still higher than where they were a year ago.
    • There could be a lag factor for many companies to see a benefit from lower coffee commodity costs. Starbucks tipped off during its FQ1 earnings call (transcript) it has 94% of its 2015 coffee needs already priced.
    • Arabica coffee price chart
    • Related stocks: GMCR, SBUX, JVA, SJM, KRFT, DNKN
    • Related ETFs: JO
    | Mar. 2, 2015, 2:34 PM | 1 Comment
  • Feb. 18, 2015, 4:02 PM
    • The International Coffee Organization expects global coffee demand to rise 25% by 2021.
    • Expectations for rising demand in China, India, and Latin America is partially behind the strong forecast.
    • The coffee market is under pressure currently from tight supply due to crop difficulties in Brazil.
    • A sharp drop in the real has counterbalanced the supply shortage to a degree.
    • Related stocks: GMCR, SBUX, JVA, SJM, KRFT, DNKN
    • Related ETFs: JO
    | Feb. 18, 2015, 4:02 PM | 14 Comments
  • Oct. 2, 2014, 1:10 PM
    • Arabica coffee futures reached a five-month high as a prolonged drought in Brazil now appears likely to impact next year's crop as well as this year's.
    • Coffee watcher ICO estimates a 10M production bag deficit could result due to the weak crop amid an environment of rising global demand.
    • Arabica coffee chart
    • Related stocks: GMCR, SBUX, JVA, SJM, KRFT, DNKN
    • Related ETFs: JO
    | Oct. 2, 2014, 1:10 PM
  • Aug. 26, 2014, 3:57 PM
    • Brazil coffee production could end up down 18% Y/Y when the harvest ends next month. A severe drought in the nation has destroyed a large swath of crops.
    • The shortfall in the nation is included in a forecast from Citigroup that calls for a global coffee deficit which could last until 2016 and pressure prices.
    • Related stocks: GMCR, SBUX, JVA, SJM, KRFT, DNKN
    • Related ETFs: JO
    | Aug. 26, 2014, 3:57 PM | 1 Comment
  • Aug. 4, 2014, 2:19 PM
    • Strong local demand from coffee-producing nations Brazil, Vietnam, and Colombia could help keep coffee prices elevated this year.
    • Overall coffee demand is expected to hit a record this year due in part to rising incomes.
    • Though the upsurge in demand is primarily for the lower-priced bean varities, there is also a slow global shift in mix toward the higher-priced Arabica beans under way.
    • Starbucks (SBUX +0.6%), Dunkin Brands (DNKN +0.3%), Kraft Foods Group (KRFT -0.3%), and J.M. Smucker (SJM +0.1%) have all increased prices on coffee this year.
    • Related ETF: JO
    | Aug. 4, 2014, 2:19 PM | 4 Comments
  • Jul. 8, 2014, 9:12 AM
    • Coffee prices continue to retreat from their highs as improved weather in Brazil and strong output in India pushes up estimates on global output for the robusta and arabica varieties.
    • Many coffee sellers have already lifted retail prices (KRFT, SBUX, SJM, DNKN) and could see a benefit if their purchasing contracts get locked-in at lower levels.
    • Related ETFs: JO
    | Jul. 8, 2014, 9:12 AM | 3 Comments
  • Jun. 17, 2014, 6:57 AM
    • 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
    | Jun. 17, 2014, 6:57 AM | 6 Comments
  • May 14, 2014, 11:25 AM
    • Coffee prices could be driven higher later this year due to high demand for premium beans and a tight supply as a result of a harsh drought in Brazil.
    • The International Coffee Organization forecasts H1 coffee production will be down close to 5%.
    • The wildcard: An early outbreak of El Nino could also disrupt crops across South America.
    • What to watch: Starbucks (SBUX), Tim Hortons (THI), McDonald's (MCD), and Keurig Green Mountain (GMCR) could get pinched if coffee prices push significantly higher. Analysts note not all of the input costs can be passed off to consumers and hedging strategies weaken above a price level of $3/pound.
    • Related ETF: JO
    | May 14, 2014, 11:25 AM | 6 Comments
  • Apr. 29, 2014, 7:15 PM
    | Apr. 29, 2014, 7:15 PM
  • Apr. 28, 2014, 7:40 AM
    • Coffee prices could keep rising as fresh estimates on Brazil's coffee harvest point to more weakness.
    • Marex Spectrom expects a harvest in the 2014-2015 season of 49M bags vs. a prior forecast of 55M bags and 53.3M bags a year ago.
    • Analysts say the Arabica supply situation is deteriorating due to harsh weather in Brazil
    • Related stocks: SBUX, GMCR, JVA
    • Related ETFs: JO
    | Apr. 28, 2014, 7:40 AM | 3 Comments
  • Apr. 7, 2014, 10:01 AM
    • Prices for Arabica coffee move higher as concerns about dry weather in Brazil mount.
    • Brazil's National Coffee Council lowered its forecast for this season's harvest to 40.1M-43.3M bags from 44M bags.
    • It's not sure bet that Starbucks (SBUX -1.3%) will pass on any sustained price increase to consumers this year. The company reportedly lowered prices at some of its stores last week in a move that might have been a response to McDonald's free coffee week. CEO Howard Schultz has also been vocal about holding off on price increases.
    • Related ETF: JO
    | Apr. 7, 2014, 10:01 AM | 1 Comment
  • Mar. 25, 2014, 1:05 PM
    • Coffee futures show increasing volatility as strong rains in Brazil bring relief to the drought-stricken region.
    • A measure of volatility on the 60-day Arabica futures contract hit its highest level since 2000 as prices eased back to $1.743 a pound earlier today.
    • Citi forecasts prices will fall in range of $1.51 to $2.25 over the next few quarters as the impact of the drought lingers.
    • Related stocks: SBUX, GMCR, JVA, DNKN
    • Related ETFs: JO
    | Mar. 25, 2014, 1:05 PM | 6 Comments
  • Jan. 8, 2014, 3:26 PM
    • Coffee prices continue to surge after torrential rains in Brazil threaten to damage as much as 40% of the nation's arabica crop.
    • Arabica coffee futures for March delivery are up 3% on the day and 19% since early November, but still stand at a historically-low level.
    • Premium coffee sellers such as Starbucks (SBUX +0.6%) and Green Mountain Coffee Roasters (GMCR +1.1%) favor the arabica bean.
    • Related ETFs: JO
    | Jan. 8, 2014, 3:26 PM | 2 Comments
JO Description
The Dow Jones-UBS Coffee Subindex Total ReturnSM is a sub-index of the Dow Jones-UBS Commodity Index Total ReturnSM and is intended to reflect the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills. The Dow Jones-UBS Coffee Subindex Total ReturnSM is a single-commodity sub-index currently consisting of one futures contract on the commodity of coffee, which is included in the Dow Jones-UBS Commodity Index Total ReturnSM.
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