Since coffee beans are priced in U.S. dollars, Brazilian farmers are selling more abroad to capitalize off the strong U.S. dollar and weak real currency. Brazil is the largest exporter of coffee beans. According to the International Coffee Organization, world exports were at a record 111.7 million bags last year, with Brazilian shipments rising 15% to 36.3 million. [Bad News for Brazil ETFs]

Traders may want to keep an eye on the El Niño weather pattern, which could linger well into this year.  If it brings dryer weather to Columbia, bean quality there could be significantly reduced.  Currency markets could be a limiting factor for Coffee prices.  A stronger US Dollar has already weighed heavily on commodity prices and Coffee was no exception,” adds Options Express.

iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN