Bloomberg reports a lack of the sun's rays will shine on Colombian crops during the next several months, according to the nation's ministry of agriculture. Landslides and heavy rain are inflicting damage on plantations, German broker Eugen Atte GmbH stated in a report late last month, and the deluge is likely to continue.
"What is scarier is that, according to weather experts, the worse rains are yet to come," the report stated.
At 1:14 p.m. on Tuesday, coffee futures remained relatively unchanged, declining slightly by 0.03 percent, a 0.001 cent reduction to $3.05 per pound.
The globe's top producer of coffee is Brazil.
One U.S.-based analyst predicted the price of the commodity will continue rising because of the inclement weather.
"With concern of excessive rains in Colombia and steady demand, coffee will continue to go even higher," Sterling Smith, an analyst at Country Hedging in Minnesota, told the news service. "The scenario is very bullish."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.