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Brazil drought, bull again

Celso Oliveira, a research meteorologist at Somar, Sao Paulo coffee growing regions predicted rain with only half the normal rate for this month and February. Brazil is growing and largest coffee exporter in the world, hedge funds reinforce the expected prices to rise over the next 6 weeks.

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Weather in Brazil drought and speculation on the price of coffee is poured more money into commodities.

After two double volatility: Soaring in July 10/2014 affected by drought and then declines when the rains stabilized in November, now the risk of experiencing dry weather returned and caused damage to the flowering stage to make coffee prices soared 12% in just this week, the most marginal price increases in nearly 11 months.

John Stepheson, CEO Stephenson & Company, Toronto, said: "Coffee is a commodity depends on the weather. We have seen a serious decline in the amount of inventory in Brazil. Comes with drought, the supply is tight. "

Betting on the price of coffee

Net buyers of coffee has increased by 6.6% to 27,071 futures and option contracts in the week ended on 6/1, the largest increase since mid-October, according to the Trade Contract Commitment period Goods term, announced on 9/1.

On 8/1, Donald Keeney, meteorologist at MDA Weather Services in Bethesda, said the northern region of Brazil will continue almost completely dry in two weeks, and in the Minas Gerais and Sao Paolo most of the Men will only light rain only. Nearly 40% of crops are threatened, because the coffee plant needs water to the left.

Purchase price up to wait, risk or not?

"Betting on the weather is a measure of uncertainty," Sameer Samana, a global strategic research investment agency of Wells Fargo, said: "The overall picture coffee industry is not only short-changed term only. It is hard to look away from the vision to come. "

Net buyers of 18 commodities trade through the US fell 0.6% to 790,238 contracts in 6/1 days, according to the CFTC. Speculation 11 agricultural commodities fell 3.7% to 501,606 contracts.



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Source Caphevietnam.com