Higher Near-Term Supply Presents Call Selling Opportunities in Coffee

By James Cordier and Michael Gross
13 Jan 2007

TAMPA, Fla. (ResourceInvestor.com) -- The bulls are starting to tout their case in the coffee market as of late. Smaller production from Brazil, a 2007-2008 production deficit and increased world consumption are all factors sited by bullish traders and the media as to why coffee prices should have a banner year in 2007.

But before you bet the house on coffee prices, it might be prudent to take a look at the current supply situation in coffee and how coffee is priced. While we believe coffee prices could see a slight increase in 2007, we feel rallies will be limited. The public’s belief that a bull market is imminent, however, could create some excellent profit opportunities for astute call sellers.

More...