March 19 Weekly Summary

3/19 – Coffee futures, which hit highs of $1.74/lb last fall, are currently near rock bottom at $1.17 per pound. But things could get interesting soon. A number of key forecasters have reduced their projections for this year’s Brazilian harvest. Brazil’s IBGE statistics institute cut its arabica forecast by 500,000 bags to 40.9M. The International Coffee Organization is calling for an 11.1% decline in Brazilian arabica output to 40.0M bags. And last week, Rabobank reduced its Brazilian arabica projection to 41.0M bags. Rabobank is also calling for 2nd half 2018 coffee futures to exceed $1.30 per pound. Coffee futures have been relatively stable for an extended period, averaging low-to-mid $1.30s for the past 3 years. With 2nd half 2018 futures averaging $1.23 and 1st half 2019 at $1.31, it might be a good time to either lock-in or extend your current position.