The coffee market collapsed in the last few months
The coffee market was in the doldrums the last month or so, as needed drying weather in Brazil and a decent 2023 coffee bloom pressured prices. We were bearish coffee over $2.00 last October, even in the face of previous weather problems and tight supplies. We predicted the easing of the northern Brazil drought (at that time). We were also concerned about the Brazil Real.
Since then, we began changing our bearish attitude for our WeatherWealth subscribers last week. With La Niña ending and warming in the eastern Equatorial Pacific, a major flood situation is likely for the middle to later part of April. This is just prior to the beginning of Brazil’s coffee harvest.
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The drier Feb-March weather tanked Argentina’s soybean crop but helped Brazil’s coffee crop
A return of wet Brazil weather and a stabilizing Brazil Real has helped coffee prices recover
It will be critical for Brazil to dry out otherwise coffee prices could test the $1.90 area again, given such tight stocks.
As the eastern Pacific warms at NINO12, look how we predicted a return to wet April weather, a few weeks ago.
Warming in the eastern equatorial Pacific will help bring flooding to Brazil coffee in the next two weeks.
Indeed weather maps turned much wetter on Wednesday, as we expected. Rainfall this week into next week could be more than 250% of normal.
