1. Introduction to Commodities
  2. Commodities: Cocoa
  3. Commodities: Coffee
  4. Commodities: Copper
  5. Commodities: Corn
  6. Commodities: Cotton
  7. Commodities: Crude Oil
  8. Commodities: Feeder Cattle
  9. Commodities: Gold
  10. Commodities: Heating Oil
  11. Commodities: Live Cattle
  12. Commodities: Lumber
  13. Commodities: Natural Gas
  14. Commodities: Oats
  15. Commodities: Orange Juice
  16. Commodities: Platinum
  17. Commodities: Rough Rice
  18. Commodities: Silver
  19. Commodities: Soybeans and Soybean Oil
  20. Commodities: Sugar
  21. Commodities: Wheat
  22. Understanding Commodities Trading

Like cocoa, coffee is a soft commodity. The primary source of caffeine around the world (besting teas, sodas and energy drinks), coffee is the second most sought-after commodity in the world – behind only crude oil – and it’s worth over $100 billion worldwide.

Contract Specifications

Ticker Symbol

KT (CME Globex)

KC (ICE)

Contract Size

37,500 pounds

Contract Months

H, K, N, U, Z

Trading Hours

CME Globex: Sunday – Friday, 6:00 p.m. – 5:00 p.m. (there’s an hour break from 5:00 to 6:00 p.m. each day)

ICE: Monday – Friday, 4:45 a.m. – 1:30 p.m.

Last Trading Day

One business day prior to last notice day (last notice day is seven business days prior to the last business day of the delivery month)

Price Quote

U.S. dollars and cents per pound

Tick Size

$0.0005 per pound ($18.75 per contract)

Production

While there are single-origin coffee varieties, global coffee futures involve two types of beans: Arabica and Robusta. Arabica beans, which are considered higher quality and the most flavorful, command a premium in the marketplace. Robusta beans, on the other hand, tend to be more bitter – but they do have a 50% higher concentration of caffeine than Arabica beans. Both types grow on small evergreen bushes that mature in about three to five years. Once the bushes blossom, the coffee berry is picked, dried and roasted.

Coffee is grown in more than 50 countries in Asia, Africa, the Caribbean, Central America and South America. Two-thirds of the world’s coffee is grown in the Americas, and 90% of production takes place in developing countries. The top three producers are Brazil, Vietnam and Colombia.

Price Drivers

Any disruption to the supply chain can cause price spikes. Major price drivers include:

  • geopolitical instability
  • climatic factors
  • enterprise trading (the “Big Four” coffee roasting companies – Kraft, P&G, Sara Lee and Nestle – buy about 50% of the coffee produced worldwide)
  • speculator effect (coffee is a highly-traded commodity)

Commodities: Copper
Related Articles
  1. Investing

    Coffee: The Cost Of A Cup

    A look at what goes into the cost of coffee.
  2. Investing

    Top ETFs for Investing in Coffee (JO, CAFE)

    Learn about the market for coffee, one of the largest agricultural markets, and two ETFs that investors can use to obtain exposure to the coffee market.
  3. Investing

    The 5 Best Cities to Open a Coffee Shop in the US

    Learn about the five top cities in which to open a coffee shop, and what differentiates Americans from coffee drinkers in the remainder of the world.
  4. Investing

    How Sustainable Is the Coffee Price Rally? (CAFE, JO)

    Coffee ETNs have risen 12% since the start of 2016. What’s driving this rise, and will the momentum continue?
  5. Investing

    America's Caffeine Cravings Keep The Coffee Industry Growing

    Five major coffee stocks that have seen very significant levels of growth in the last year.
  6. Tech

    A Coffee ICO to Get Your Day Started

    A startup that intends to streamline operations in the coffee industry with blockchain is planning an ICO.
  7. Investing

    3 Best Coffee Stocks for 2017

    Market watchers are predicting a jump in coffee in the next 12 months. If java's your morning jam, try these top coffee stocks.
  8. Trading

    How to Trade the Move in Coffee (JO, SBUX)

    This article will take a look at several major coffee-related assets and outline how traders are looking to profit from the price change in coffee futures.
  9. Investing

    Unique Ways To Profit From Coffee

    Here are some unconventional ways to profit from one of America's most inelastic commodities--coffee.
Frequently Asked Questions
  1. What's considered to be a good debt-to-income (DTI) ratio?

    Your debt-to-income ratio helps lenders determine your credit worthiness. Find out how to calculate your score and how to ...
  2. What is the difference between a loan and a line of credit?

    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ...
  3. What does a Chief Financial Officer (CFO) do?

    A CFO is responsible for accurate reporting of a company's financial information, investing the company's money and identifying ...
  4. How did George Soros break the Bank of England?

    George Soros pocketed $1 billion by betting against the British pound, cementing his reputation as the premier currency speculator ...
Trading Center