Commodity Market Review: Wheat, Coffee, Cocoa Prices Surging Over Week


  • We are currently in what is referred to as a “Weather Market” in grain commodities as unusually bad weather continues to plague the Midwest and dictate market moves to the upside.
  • Coffee markets influenced by currency fluctuations and natural factors.
  • Production Issues in Ghana and Ivory Coast lead to decrease in Cocoa production and increase in prices in longer term .


Extreme weather in the Midwest has been the underlying factor pushing wheat prices from their May 13 low of 418.5 dollars per bushel. Since then, prices have broken out of a previous downtrend and have rallied to over $520. Fundamentally, this has had to do with adjustments to productions forecasts as farmers have not been able to plant crops in time due to the precarious weather as revealed in the USDA crop progress report released on May 28. This price action has overcome bearish factors that may be an issue in the future.

Furthermore, a global economic downturn could result from new trade policy which could directly negatively impact foreign demand for domestic grains such as wheat and soybeans. An example of this is China cutting US grain imports in a blow to US farmers. This is part of a broader trade conflict with an uncertain future.


The coffee market is unique from other soft commodities in the sense that it is sourced almost entirely from foreign countries and therefore is subject to a different set of macroeconomic factors. One of the most important producers of Coffee beans is Brazil and there is a notable relationship between the Brazilian Real and Coffee. As the Real appreciates so does the value of coffee in USD. This has to do with trade and a stronger Brazilian real will lead to higher coffee prices in the US as Brazil exports it to the US. In the last few weeks, the Brazilian Real has appreciated against the US dollar as the rate for USD/BRL has gone from .243 on May 20 to .255 on June 3 which represents an increase of 4.948%. This stems largely from geopolitical changes in the region and currency speculation. In the same time frame, Coffee has increased approximately 16%. The currency effect is compounded by fears of a cold snap that may harm production in Brazil and has lead to temporary increased demand for the commodity in the short term as traders fear projected decreases in supply.


Similarly to Coffee, the supply comes from foreign countries, in this case 60% of which comes from the West African region of which Ghana and Ivory Coast are the crown jewels. As such, their exports are subject to climatic and other natural factors in the region and this year crops in Ghana have suffered significantly from root disease. Projected production has been slashed from 900,000 to 800,000 tons, contributing to this years gradual increase in prices and series of higher lows and higher highs for Cocoa futures this year. In the shorter term there has been a slight selloff.

I Know First Forecast Performance

Commodities Price Outlook

On 24th May, 2019 I Know First algorithm issued bullish predictions for commodities for a 7 days time horizon. The predictions include CME_W1 (Wheat futures contract), ETFs tracking Coffee and Cocoa prices with positive signal of ranging 0.7 to 1.37 with predictability indicator ranging from 0.11 for Cocoa to .15 for Coffee. Over the 7 days trading period from 24th May to 1st June, CME_W1 gained 9.41% and Coffee rose by 9.46%, in good agreement with the I Know First forecast.

This bullish commodities forecast was sent to the current I Know First Subscribers on 24th May, 2019 .

How to interpret this diagram

Algorithmic Stock Forecast: The table is a commodities forecast produced by I Know First’s algorithm. Each day, subscribers receive forecasts for six different time horizons. Note that the top 10 commodities in the 1-month forecast may be different than those in the 1-year forecast. In the included table, only the relevant commodities have been included. The boxes are arranged according to their respective signal and predictability values (see the link for detailed definitions). A green box represents a positive forecast, suggesting a long position, while a red represents a negative forecast, suggesting a short position

Please note – for trading decisions, use the most recent forecast. Get today’s forecast and top commodities picks.

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