A1 Trading Company

November 4, 2021

Why you should pay attention to Coffee Futures

Sean Streb

By Sean Streb

The Update

Last week I posted an article about how to take advantage of future inflation and the supply shock occurring in the United States and abroad. Towards the end of the article, I briefly referenced a futures ETF called $JO, and how it matches the characteristics of an asset that will benefit from supply shocks and the increased money supply. I think we will see some movement in this stock in the coming days and weeks

The News

Earlier this morning, Reuters posted a great article about how coffee farmers are defaulting on contracts with traders. Previous to this, Yahoo Finance did a piece on how major coffee companies were hoarding beans in anticipation of a shortage. Middlemen and coffee suppliers are having difficulty buying coffee in Brazil and some of these traders are actually suing the suppliers for defaulting on their crops. Reuters notes that this increased scarcity could drive futures contracts higher than they are despite the fact they are already near at 7 year highs. This benefits $JO as it is an ETF that buys and sells monthly coffee futures contracts, and an increase in prices would push this ETF up.

Some Analysis

$JO has a solid upward trend, approaching a previous double top support. The stock also gapped up three days ago on November 1st. If we couple this with some of the points I brought up in my previous post: During the pandemic, coffee was inelastic good, meaning that people continued to demand a similar amount even if the price increases. This is a surprise to no one as America is addicted to caffeine. There is a supply issue: shipping delays, crop issues and defaults have decreased the supply. Add all this to the increase in coffee futures, and we get a better picture of what might happen to the value of this commodity in the near future.

For questions and comments, you can reach me at smstreb97@protonmail.com or through the A1Trading discord at @smstreb97

A1 Edgefinder

AI- Generated Trading Setups
AI-generated bullish/bearish bias setups on forex currencies, gold, & indices.

Discount code: 'READER'

Access Now

Free

Trading Plan Template
Struggling to build a successful trading plan? Download our template to get started today!
Download
Expecting A Pullback

Today's economic figures came out in US and Canada. GDP came in higher than expected in Canada while the price of goods purchased by consumers was lower than last month. Here are some pullback ideas for USD and CAD from GDP and PCE numbers. EdgeFinder Analysis NAS100 is a bullish reading on the EdgeFinder still. […]

Read More
Traders Wait For More Inflation Data

This week has brought more inflation data with it regarding the USD's PCE and PMI numbers. Powell is also set to speak this Friday about monetary policy going forward. The RBNZ will also release their latest interest rate news tomorrow with expectations of an unchanged rate at 5.5%. EdgeFinder Analysis GBPUSD is a bullish bias […]

Read More
Trading Into PMI Data on EUR, GBP and USD

This week is a big PMI week for Europe, UK and US. Additional inflationary metrics will add to the overall sentiment of these countries' monetary policies going forward. Here are some setups for the coming week on these currencies. EdgeFinder Analysis GBPCAD is now a +7 on the EdgeFinder as we wait for CPI news […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonecrossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram