What’s HOT & What’s NOT
It’s HOT chocolate as cocoa is now more expensive than copper, making yet another new all-time high at $10,324 per ton on Tuesday.
Futures surged 60% during the month of March, are up 145% year-to-date and sit 270% higher than where they were trading just one year ago as extreme weather has decimated Africa's growing crop.
If you are like me, you could use a cup of hot chocolate right now as it feels more like February than April outside today, especially with the blustery winds:
Perhaps you can grab a HOT cup of coffee - because that market is on fire too as robusta futures hit a new all-time high of $3,812 per tonne today - up 12% the past five trading days and 75% the past six months.
Robusta’s record highs come as futures soared for the second day in a row as drought is impacting production in #2-supplier Vietnam.
Most of the world’s coffee is produced in a belt bound by the Tropics of Cancer and Capricorn which offer ideal conditions for growing beans.
Did you know Brazil is responsible for nearly 40% of global coffee production? Me neither.
Although not all-time highs, arabica futures made contract highs today, supported by the moves in robusta plus concerns that recent Brazil rains have damaged the crop.
Arabica’s most recent rally was two years ago, as La Niña was putting the whammy on both Brazil’s soybean and coffee crops.
While I drink my fair share of coffee each morning… I will be the first to admit I have never paid much attention beyond making sure I am purchasing the right type of pods for my Nespresso machine.
90% of world coffee trade is in green (aka unroasted) beans.
Arabica dominates world consumption with its smooth and slightly sweet taste. Robusta is bitter and harsh, usually used for instant coffees and in small amounts in espresso blends.
And since we are on the topic of commodities I never talk about - let’s hit on the not-so-HOT situation in rough rice, down 13 days in a row prior to today’s 2.7% bounce, settling at $16.510.
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