I'm looking for the nasdaq composite index to close around 4110 today to possibly signal an end to the nasdaq selloff. That would be an emphatic hammer candlestick at the bottom.
JVA is being dragged through the mud unfairly and the nasdaq index selloff needs to stop. So far this morning nasdaq is looking pretty good for putting in a bottom. Now if it can only close at these levels...
I just had hundreds of thousands of $'s disappear since Friday's close. I'm trying not to freak out and think it's because Ameriwoops released new faulty software over the weekend. You guys might want to check TOS and see how much you lost too.
Too soon to speculate, I'm not sure there's ever been a shortage. If there is a shortage, it probably won't happen until 2015 but alarm bells will go off well before that happens so it'll start getting priced in sooner than that.
2013 was a bumper crop in Brazil. Supplies were so abundant they actually stored the excess as inventory, something they normally don't do. However, the drought was so bad in 2014 that the inventory is already at 16 month lows. When I saw the very low production estimates for 2014-15 that were released on Friday night, that's when my own alarm bells started going off. The situation may be worse than I even feared.
Companies like Starbucks keep a large inventory on hand. I think Starbucks won't need to buy for about a year. At some point, however, it's going to hit the fan so it's going to be a dynamic situation all year....especially if the Super El Nino hits. I think 2014 will see extremely volatile coffee prices as a result but the overall trend will be higher and perhaps a lot higher as talk of a coffee shortage becomes serious. JVA has it's own inventory of coffee ($9 million I believe when coffee was $1.20).
I wouldn't worry about an actual shortage in 2014 because of the inventory built last year but I think it's coming in 2015 and it will be priced in much sooner than when it happens.
There are very few ways to profit from high coffee prices. You can buy the ETN's but there's very few stocks that benefit from higher prices. JVA happens to be one of the few.
If JVA went up 500% in 4 months when coffee prices rose to $3 in 2011, imagine what it can do if coffee hits $4.
The reason I'm so bullish on JVA is that Brazil just had a historic drought and the damage to coffee production could be immense. It will take more than a year to recover so not only are you looking at high coffee prices, but they could be high for a very long time.
JVA earnings could triple later this year. Once coffee prices go back over $2, which could happen this week, JVA will be the stock you want to own. All heck will break loose once coffee prices go around $3 and due to lowered production forecasts, I think this will become a reality. A coffee shortage scenario is appearing more and more likely and JVA will be a monster.
Check out what this commodity broker and commodity expert just predicted on Saturday:
Saturday, April 5, 2014
The new black gold?
By Shawn Hackett
"We are in the midst of one of the greatest bull markets in coffee history. Demand rationing is very likely going to be required over the next 12 months as a one in one hundred year drought event allows for two to three years of production impaired coffee crops in the number one producer Brazil.
The coffee market has no excess inventories to speak of to handle this kind of a supply squeeze as it has had in past weather shocks. In order to sufficiently ration demand, prices will need to move up to $4 per pound over the next 12 months and could easily see $6 should further weather problems surface in Brazil or Vietnam.
The recent correction offers and incredible opportunity to buy coffee ahead of the next parabolic advance.This is the bull market to play in 2014 in overall commodities."
Exactly. In all honesty, 2014-15 could see historic coffee prices. The drought in Brazil in Jan-Feb was called the worst in many decades. This causes trees to grow fewer branches which will impact this AND next year's output. Also, the trees have less water content so they will be more susceptible to damage when frost occurs. Combine this with the fact that coffee consumption is rising worldwide. Let's add that there is also very dry conditions in Vietnam and India, both very large coffee growing regions that also say their production will be lower this year as a result. Lastly, scientists say the Super El Nino that is being forecast is taking shape in the Pacific right now and may already be responsible for the drought conditions in coffee growing regions worldwide. The Super El Nino will wreak havoc with weather conditions starting as early as June and the Brazilian harvest which should be during dry conditions now may have to endure heavy rains which will further cause disruptions to production.
Bottom line: Worldwide coffee consumption is up and there are numerous reports of drought and pest damage (I haven't even talked about that) in the largest coffee growing regions. Inventories are already at 16 month lows and there's less production to restock. It feels like a coffee crisis is brewing and it will last well into next year. Coffee prices could reach historically high prices as a result. Sorry if it sounds like I'm being a cheerleader, I'm not. All my research is showing a potentially serious global coffee problem. The headlines may not seem dire now and I'm probably a few months ahead of the curve but I honestly expect to hear about a potential coffee crisis in the coming months and soaring prices as a result.
Hedge funds are a lot smarter than me so if I see trouble ahead, they are already acting on it. As of last week, hedge funds have taken their largest long positions in coffee in over 6 years. They know what is getting ready to happen
This news could cause coffee to soar. Coffee was being priced in with estimates of production at 48 million bags, and on Friday night they were lowered significantly to 40-43 million. Even more shocking is the estimates for 2015. Coffee trees damaged by the drought are affected longer term, more than just planting crops. Reading these lowered estimates immediately make me think there may be an actual coffee shortage in 2015.
Investors like to price in news well in advance of it actually happening so the lowered coffee estimates may light a fire under the price of coffee as early as Monday. It may go above $2, we shall see. If THAT happens, investors will start pouring (pun intended) into JVA.
As for Friday's coffee prices going up 6% in a single day, I agree that these new estimates were known by some. But the forecast was also for drier weather in the coffee growing areas next week and that may have helped bolster the price as well.
If coffee prices go above $2, you will not have to wait for earnings to get a significant price and volume increase here. Based on Friday's estimates, I now believe the threat of a coffee shortage in 2015 is real.
We'll see what happens to coffee prices on Monday and whether this news is as significant as I believe it is.
This news was released on Bloomberg news tonight AFTER the markets closed. This could cause a serious spike in the price of coffee on Monday. I had seen previous estimates around 45-48 million bags of coffee, that has now been lowered to 40-45 million bags. (Normal production is around 51 million). Estimates for 2015 were also lowered (to between 38-43 million) which means that coffee prices will go high and stay high. That means an extended period of exceptional earnings for JVA is likely. Coffee inventories are already low and with these lowered production estimates for 2014 AND 2015........
Wow for JVA!
Brazil Coffee Crop Estimate Cut on Heat and Drought, Group Says
By Mario Sergio Lima Apr 4, 2014 5:14 PM ET
"A Brazilian coffee industry group lowered its 2014 crop forecast for the world’s biggest grower and exporter of the bean to a range of 40.1 million bags to 43.3 million after drought and excessive heat.
Output will be below a January estimate by the country’s government-controlled crop forecasting agency that expected a range of 46.5 million bags to 50.1 million, according to a study from Fundacao Procafe ordered by Brazil’s Coffee Council.
The country had its worst drought in 80 years in the first quarter. Brazil is expected to harvest between 38.7 million bags and 43.6 million in 2015, the industry group said today.
The coffee council study was released after trading in regular markets closed. Prices for the mild-tasting arabica type rose 5.96 percent in New York today, to $1.85 per pound, the biggest rally in a month, on supply concerns."
March 31, 2014
"Hedge funds extended their bets on rising commodity prices for an eighth successive week, led by grains and by arabica coffee, in which they were at their most bullish in six years."
"it was arabica coffee which achieved the most notable turn bullish in hedge fund positioning, which the net in New York futures and options topping 43,000 contracts for the first time since March 2008."
"The bean has been lifted by concerns over dryness in Brazil, the major producing country."
"And although prices fell significantly in the week to last Tuesday, amid talk of rains for Brazil's coffee belt, the decline appears to have been used as an excuse by hedge funds to cover net short positions."
"The gross short in New York arabica coffee fell to 5,168 contracts, the lowest since May 2011."
Sources: Agrimoney, CFTC
1. Brazil had it's worst drought since the 1950's
2. Until the May harvest, the extent of damage to the coffee crops won't fully be known. This is why coffee prices are volatile.
3. Hedge funds have the largest long position in coffee futures since 2006.
4. Dry weather in Vietnam is also causing problems with coffee production, this for the less expensive Robusta coffee beans.
5. Scientists are sounding alarm bells for a Super El Nino later this year. They are seeing conditions in the Pacific ocean that have not been seen since 1997, which was the last time the world had a Super El Nino
6. Coffee prices have spiked only 2 times significantly in the past 20 years. One of those years, 1997, happened to be the year of the Super El Nino
7. Is the drought in Brazil and Vietnam being caused by the Super El Nino getting cranked up? It surely looks possible.
8. Coffee inventory is the lowest it's been in 16 months.
9. The last time coffee prices were high, in 2011, JVA spent 30% of the year over $15/share. With about an equal number of shares today, expect the same this year.
10. Back on June 6, 2011, JVA was $7. After a very strong quarterly report, the stock jumped over 300% in one month!
11. Having dealt with a superspike of coffee prices in 2011, the company should already be experienced on how to better capitalize on a similar scenario given that it happened only 3 years ago and is still fresh in their memory.
12. Exporters are starting to provide estimates for coffee inventories. Some are predicting a 20% decrease from a year earlier due to the drought.
13. Technically, JVA is above all major resistance levels on short and long term charts.
14. With a Super El Nino becoming more likely later this year, it is flip flopping normal weather patterns in coffee growing areas. Wet season was dry, and the dry season (at least in Brazil) will become wet when they are supposed to be harvesting. This will continue to pressure production and inventories.
If the NASDAQ index continues falling you may get another chance, but with coffee going up as much as it is today, the only way I see JVA falling any lower is if NASDAQ continues to collapse and drag everything down with it. Coffee up 5% today at $1.84 and I see it going back to $2. That will bring the momo players back here once again.
I'm not worried at all. The previous high growth stocks with outrageous p/e's like amzn, nflx an fb and all the biotechs are selling off deeply. Jva just happens to be in the same index but with coffee prices going higher and the coffee inventory at 15 month lows, jva should be going up, not selling off. I just hope the nasdaq index is about done with this nonsense so individual stocks can perform normally and not get thrown out with the other garbage.
The entire NASDAQ index is collapsing and is taking almost everything down with it. Coffee prices are soaring today, up over 4% at over $1.80. JVA is caught in the NASDAQ selloff and nothing is immune. However, it has been my experience that people will keep drinking coffee and JVA will be a monster (from current price levels) once the NASDAQ index stabilizes or finishes doing whatever it wants to do.
Finally saw the breakout of earnings. If it weren't for a $486,000 non-recurring expense, this would have been a fantastic quarter. It certainly was from a revenue standpoint.
"During the year ended December 31, 2013 we recorded impairment of $485,999 on the Sprayberry property."
In other news, I'd really like to see FPP finish above $5.10 soon. I noticed on a chart I made that over a period of 10 years, FPP's price has been trading in a consolidating triangle. It has not traded higher than the top line of the triangle since 2005. If FPP's price can get above $5.10, I see that as a major obstacle in breaking out from what has been a very long price consolidation. (The bottom line is around $3.90 so the range from top to bottom is incredibly tight).
Think about it. If the job report is absolutely horrendous, the market would go UP. Why? Because it raises the chance the Fed would pause raising interest rates.
However, if tomorrow will be a phenomenal jobs report, the market would go DOWN. Why? Because it raises the chance the Fed would raise interest rates sooner than forecast.
Not everything is as it seems.
YES!!!!!!!! The best financial advice is to do the opposite of what Jim Cramer says. This means a big upside surprise is coming for AAPL.