The second week had been a good week for coffee. Throughout last week, price of coffee continues to rise. Brazil and other South American coffee producing countries have been experiencing unusually persistent dry and hot weather, which are not conducive for coffee plantation. The weather concern is most likely the main driver of the surge in price. Analysts also viewed that coffee producers have been reluctant about increasing level of production at the current coffee price level. The producers want the price to surge to profitable level as the current price level is discouraging extra production.

The 5% gain in my portfolio value in this second week is largely attributed by the strong performance of coffee in future market. Wheat price has been eclipsing around $5.12 per bushel level. The price of wheat seems to fluctuate up and down around that price level. I wouldn’t expect any drastic movement in the week ahead. I also made a good decision last week to short my cotton. From this transaction, I gained profit of $620. Price of cotton has been going up and down since then with many speculations on downward trend in price movement as severe weather in several places in US has damaged the crop.

Based on my observation towards soybean price that have upward trend, I expect price of corn to be moving at the same trend as both goods are substitutes. However, corn has not moved as I speculated it to be, the price hasn’t increased much since then. I also took a long position on sugar, as USDA reported that Brazilian sugar exports currently to hit the lowest in seven years.

So far it’s been a good week for my portfolio, thanks to coffee!

Until then, happy trading and enjoy your coffee!

O