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COFFEE
Contract History
ICE Futures U.S. Coffee "C" is
the benchmark contract for Arabica coffee. As the world's leading coffee contract, the coffee industry looks to the Coffee
"C" contract each day to price Arabica. The Coffee "C" futures and options contract trade the equivalent
of 7 times the world's coffee production annually. Brazil and Columbia mainly produce Arabica coffee. Vietnam produces Robusta coffee,
which is considered to be lower quality than Arabica. Arabica is the type of coffee traded at ICE Futures US.
The
U.S. coffee futures market was established in 1882 as merchants and traders created the Coffee Exchange of New York
to bring order to pricing in the industry. When a commodity such as coffee assumes a growing position in the global economy,
it also invites vulnerability to major price shocks and increased hedging and trading activity. Volatility in the coffee market has been historically greater than that of other soft commodities
markets, often triggering increased levels of activity from both hedgers wishing to lay off risk and financial participants
willing to take on those risks. The result is more bids and offers providing a critical mass of liquidity, hedging, and pricing
opportunities.
Coffee Futures & Options Brochure
Click on the link above to download a very informative .pdf brochure entitled "Coffee
Futures & Options". It was published by the New York Board of Trade. This is a must read guide for any novice or
advanced trader considering an investment in the coffee commodity futures and options markets.
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