In my 2023 recap on soft commodities on Barchart, I highlighted the 12.55% annual gain in ICE coffee futures. Nearby Arabica coffee bean futures settled at $1.8830 per pound on December 29, 2023. 

Before the end of last year, in mid-November, I asked if it was the time to hop on the emerging bullish trend in coffee futures. I wrote:

Meanwhile, the recent price action and rallies in the other soft commodities indicate that coffee futures could have lots of upside potential from the current price levels. 

On November 13, 2023, nearby ICE Arabica coffee futures were at $1.7805 per pound, while ICE Robusta futures were at $2,484 per ton. In February 2024, Arabica and Robusta futures were higher than the mid-November prices.

Arabica coffee futures rallied since October and the end of 2023

ICE Arabica coffee futures for March 2024 delivery have made higher lows and higher highs since October 10, when they reached a $1.45 per pound low. 

The chart highlights that coffee futures reached the most recent high of $2.0390 per pound on December 19. At over $1.96 per pound on February 9, the Arabica futures remain in a bullish trend. 

Robusta futures are on a bullish path

Meanwhile, ICE Robusta coffee bean futures trading in Europe reached a $2,179 per ton low on November 10, 2023.

The chart shows the Robusta futures rose to a $3,379 per ton high on January 30, 2024, and were at the $3,349 level on February 9.

Since the November lows, the Robusta future moved 53.7% higher, while the Arabica futures were up 35.4% as of February 9 since the October 2023 low. 

FCOJ and cocoa futures experienced explosive moves

While Arabic coffee prices have been rallying, they have not come close to the February 2022 $2.6045 high, the highest price since 2011. Meanwhile, the continuous Robusta futures reached over a decade high at $3,448 per ton in January 2024. 

Coffee is not the only soft commodity that has been rallying over the recent years, months, weeks, and days. In late 2023, frozen concentrated orange juice futures exploded to a new record peak. 

The chart illustrates the FCOJ rally that took the price to a $4.3195 per pound high in October 2023. Before 2023, the record high dating back to 1970 was $2.35 per pound. At over $3.73 per pound on February 9, OJ prices remain well above the pre-2023 peak.

The latest soft commodity to experience an explosive rally has been cocoa. 

The chart shows nearby ICE cocoa prices moved to a $6,030 per ton high last week, surpassing the 1977 high when cocoa futures reached a record $5,379 peak. Cocoa is on an express train to the upside. 

Sugar and cotton are in bullish trends

Sugar and cotton round out the soft commodity sector, and their prices have been in bullish trends. 

The ICE world sugar futures chart illustrates the 2023 rally that took the price to the highest level since 2011. After a correction that held 20 cents per pound, sugar futures have recovered but were over 24 cents per pound on February 9. 

ICE cotton futures rallied to the highest level since 2011 in May 2022. After falling to just over 70 cents per pound in October 2022, cotton futures have recovered to nearly the 92 cents level on February 9. 

Coffee could have further upside as soft commodities have led the asset class in 2023 and early 2024

Soft commodities were the best-performing sector of the commodities market in 2023, and the bullish price action is continuing in 2024, with cocoa leading the way on the upside. However, sugar, cotton, and FCOJ prices are all higher than the 2023 closing levels on February 9. While Arabica coffee futures have been virtually unchanged since the end of last year, Robusta futures have moved higher. The trend is always your best friend in markets across all asset classes, and the path of least resistance of soft commodities remains higher in February 2024. Arabica coffee futures have lagged behind the other softs, which could mean the coffee market could have some catching up over the coming weeks and months. Technical resistance for Arabica coffee futures is at the $2.0390 level, the December 2023 high, $2.0745, the April 2023 peak, and $2.6045 per pound, the February 2022 peak, which is a gateway to the 2011 high at over $3 per pound. 

No ETF or ETN products track Arabica coffee prices, so the only route for a risk position is the futures and futures options trading on the Intercontinental Exchange. Based on the price action in the sector, coffee has an excellent chance to challenge the 2022 high over the coming weeks and months. 

• Cotton Surges into the Weekend
• Cocoa Prices Continue to Post Record Highs on Scant Global Supplies
• Sugar Prices Supported by Reduced Brazil Sugar Cane Crush Estimates
• Coffee Prices Rallies Sharply on Dryness in Brazil and Record Low Robusta Supplies