Decreased Drought Impact Brews Coffee Bear Market

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June 9 (Bloomberg) -- Bloomberg's Matt Miler, Greg Bender and Phil Streible, senior commodity broker at RJ O’Brien & Associates, put coffee futures in focus. They speak in "On The Markets" on Bloomberg Television's "In The Loop."


We are also talking about coffee.

The price of coffee futures surged earlier this year.

Last year, they entered the ball market at 20%. we will look at why coffee futures are living off.

The senior commodity broker at rj o'brien and associates there that start with you.

What do you think about the bear market we entered a week ago?


All of this is because the consensus is that the drought had done a look -- less damage than brazil.

Brazil produced about one third and one half of the world passes coffee.

They are a key growing company.

They're coming up for a hard this year in june or the and is is they should bear 47 million per bag.

Last month, 42-45. we are getting a little more than a vested.

We are at a support level of 170. we bounce off there several times in the past three or or weeks.

We should break -- or four weeks.

We should break through their.

Trade on coffee, do you sell coffee futures at 170i've enclosed a trade at 160? that is a prophet of the scene dollars or hundred -- or hundred pounds.

The cost 500 pounds each.

That is what a contract is.

The total profit is $5,600.5. let me ask you why we have seen the bear market in coffee.

People are not drinking less coffee.

The definition of a bear market is arbitrary, as ashley in this case, when you have prices above 14% above a moving day average.

We still have not taken out the 160 and 170 support level from back in lot -- in march.

We do know what options traders are looking at is still relatively high and we realize volatility is still relatively high.

Traders are focused on the indecision about the effective that in the future.

There are two in areas that will play out -- it is not as bad.

The drought is not as bad as players may have thought previously.


That is what a lot of speculators into the market, the level of speculation, the amount of speculators is still long in the market.

The true scenario you can look at his we're basically going into some type of a range here or if we break lower, than we are really in the bear market.

We are really in a bear market at least as far as the traditional measurement of 20%. what are the chances going further?

I think they are quite high.

We are seeing a bit of a tale as you talked about.

Consumption is expected to increase about two percent this year.

I think the pending stockpiles we had from previous years, along with the better than expected crop we will see because of the late harvest rain, it is a high probability that it occurs.

We often hear the term, soft commodity.

What is the difference between soft money and hard commodity question mark -- commodity?

I have always wondered because oil seems fairly soft as well.

Greg bender there from bloomberg trade book.

Thank you very much.

We are on the markets again in 30 minutes.


They have had seven years to get ready and spent more than $10 billion preparing for the biggest sporting event in the world.

The opening kickoff to the world cup is just days away.

Brazil is still not ready.

The question on everyone's mind is why?

We traveled to brazil to get a first-hand look at what is going on.

Let's say you're going to brazil for the world cup.

Here is what you will see as

This text has been automatically generated. It may not be 100% accurate.


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