| Coffee ETFs have been in the bearish territory since last October on record crop production, lower demand and weak broad commodity fundamentals. However, this trend seems to have reversed in recent sessions on supply concerns in Brazil and Central America. This is especially true as both coffee ETFs - iPath Dow Jones-UBS Coffee Subindex Total Return ETN ( JO ) and iPath Pure Beta Coffee ETN ( CAFE ) - surged nearly 5.4% in Monday's trading session.
Some recent reports suggest that the impact of last year's Brazilian drought could be felt this year and could result in a smaller-than-expected bean size. In particular, the National Coffee Council of Brazil sees around 40 million bags of coffee as compared to the industry forecast of over 50 million bags. Additionally, supply of arabica beans could decline over the next 12 months, as nearly 60% of the Brazilian arabica crop was harvested this year against 80% in the year-ago period. ..............................................Full Article: Source
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