Commodity experts are focusing attention on the coffee market after heavy rains damaged crops in Brazil. Gains may be brewing for the exchange traded note iPath Coffee ETN (NYSEArca: JO).
Coffee for December delivery traded at $1.67 per pound while coffee delivery for July 2014 traded at $1.90 per pound, reports Trang Ho for Investor’s Business Daily. This indicates a shortage in the near future.
The iPath Pure Beta Coffee ETN (NYSEArca: CAFE) is another exchange traded note that follows coffee futures.
“The rally Monday was mainly driven by short covering due to fears Hurricane Isaac would disrupt shipments from South and Central America into New Orleans, the earthquake in El Salvador and traders closing out positions ahead of the Federal Reserve’s scheduled speech Friday,” Jack Scoville, vice president of the PRICE Futures Group said.
Some analysts are expecting coffee to reach $2.50 per pound over the next year, and up to $4 per pound over the next two years. [Slumping Coffee ETN Looks for Jolt at Kye Technical Level]