📈 COFFEE // ready for take-off
The market is in long expansion, going for the monthly fibo target
Key Chart (H4) - KC1!
The market is bullish, in the expansion phase, and the monthly target fibo 138.2 is close to the H4 target fibo 200.
If the clean H1 breakdown is crossed up significantly, and waves keep going up, this target becomes valid again.
Key Fundamentals
Summary
The global coffee market is navigating significant challenges, with supply constraints driven by adverse weather in key producing regions and robust consumer demand sustaining upward price pressure.
Key Factors
• Supply Constraints:
• Brazil, the largest coffee producer, is enduring its worst drought in decades, significantly reducing yields and straining global supply (AP News).
• Similarly, Vietnam, the second-largest producer, is grappling with adverse weather conditions, exacerbating global shortages.
• Rising Prices:
• Tight supply and high demand have driven coffee prices to a 13-year high as of August 2024 (AP News).
• In Europe, coffee inflation is noticeable, with espresso prices in Italy climbing toward €2 (The Times).
• Consumer Demand:
• Despite higher prices, demand remains robust, particularly among younger demographics. Analysts project coffee to become the second-fastest-growing restaurant category in the U.S., driven by preferences for specialty and iced coffee (Barron’s).
Actionable Insights
• Bullish Case: Supply shortages and growing specialty coffee demand are expected to support elevated prices in the medium term.
• Bearish Case: Increased production or improvements in weather conditions could help stabilize supply and ease price pressures.