What was different about coffee futures in 2025? Because to all of us in coffee, this felt like an insane year. And the majority of us don't have anything on, like we're not trading on the futures market. What was different about this year?
It was absolutely insane. So you're right on the target there. You know, the coffee market was kind of putting on a clinic of volatility. It's just been really, really wild.
What you may or may not have noticed is it wasn't just coffee. There was a handful of markets that experienced this. And the craziest thing about it is these handful of markets are seemingly completely unrelated, yet they were trading in the same direction almost every day. Real relations.
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Send him a message and tell him you heard about the Honduran Coffee Alliance here and start exploring what these overlooked Honduran coffees could do for your menu today. Check the show notes for links. Welcome to the Daily Coffee Pro by Map of Ford Friends. I'm your host Lee Safar and this is episode one of a brand new five-part series with a crowd favourite on this podcast, Carly Garner from DeCarly Trading.
Carly, welcome to the podcast. For the second time you see it. Is it the second time that you remember this year's gone by best? It could be the second or the third.
I don't know. He feels like the whole thing was a hallucination. It's been like there's off the rails and there's no guard rails. It's been a while.
Actually, now that you've since, I think the last time I was on was right around the April, Tierra fiasco and I've probably said some really stupid things since I was brain dead for like a month. I was just brain fried, but hopefully this won't go better. I am so brain fried right now, you're probably gonna have to carry me through this conversation. I cannot believe how much has happened to this year in coffee.
It is absolutely absurd. It's absolutely absurd. And I mean, I've been doing this for 20 years. There's really never a boring year in commodity.
Like there's always some shenanigans going on, but this has just been over the top. And there's lots of reasons for it. We'll talk about those, but yeah. We'll be, honestly, we're gonna be talking about this for a decade.
This isn't, this is just, in my opinion, I don't think this is the new normal. I think this is just working a lot of weird things out of the system. And we'll be back at this time. And I do think that, yeah.
I know it doesn't feel like that, but I've seen these things before in various markets. And when things get this chaotic, it's just unsustainable. People drop out and eventually everybody gets exhausted and things calm down. I promise you it will get it better eventually.
Might not be tomorrow, but a couple years from now we'll be talking about how low prices are. I can, yeah, I promise you that. I can't guarantee that, but I think that's probably what we're in. Well, we'll see.
But we will see. You know, you know, the reason I say that is because I was looking up to see when you first came on this podcast. You believe that was 2018? That sounds right.
Doesn't that feel like it was decades ago? It does. Seven years is a long time, but it feels longer than that. I got to say, and just look at what's happened.
We've gone, that's what I mean, complete cycle. We've gone from 90 cent coffee to $4 coffee. And it's kind of wild. And then Friday happened, the tariffs and all of that.
Anyway, we'll get to all of it. Folks, what, Cully and I would like for this series, while this series is for everybody, I have one main objective for this series. My big objective, like the theme of this series is going to be the coffee market in 2025 and 2026. And before we started recording, Cully and I were kind of looking at like, if we could have people to have one take away from this series, it's for farmers.
I would love for farmers to be able to listen to this series and say, I have a better understanding of how I can use the tools that someone like Cully has access to to help farmers benefit from a year like 2025. So that's what we hope we can get to by the end of this series. And I'd also like for people in the wider coffee industry to understand what an earth is going on with the futures market. So this is typically, trust me folks, I studied for this series.
I don't prepare for any series. But whenever I'm talking to Cully, I have to study, because this stuff is really hard for me to understand. I'm sure other people find it really easy. I don't.
So Cully, before we start with what we're going to talk about, please remind everybody what you do and what the Cully trading does. So decarly trading is a boutique commodity brokerage firm. We offer services ranging from full service to discount online trading. We handle speculators.
We also handle hedgers, commodity hedgers, cattle corn, soybeans, wheat, coffee, you name it. We help them manage the price risk. Believe it or not, the futures markets were not created for speculation. They were created for hedging.
The idea is to shift price risk from producers and end users to speculators. And that's the mechanism of it. Unfortunately, the futures markets are mostly used by speculators. I personally believe that a lot of producers and end users are leaving money on the table, so to speak, by not using these tools, which is exactly what we said we will talk about.
And you are a broker. I am. I'm a futures options broker. That is correct.
So I basically bring liquidity, bring speculators to the market, and hopefully try to give them great advice. And I've been doing this for a little over 20 years, which is pretty wild to think about. So a couple of decades, I've seen a lot of things. I can't see the future.
Nobody can see the future. So we're all guessing I'm not trying to pretend like I know what's going to happen next. But I've seen things happen over and over. Markets are driven by humans.
Humans tend to react in the same way when presented with the same circumstances. So we use these sorts of things to try to put the odds in favor of our speculators and our hedgers. And that's what we do. I also, a cheap plug, I also started a sub stack.
So if you're somebody that doesn't necessarily want to trade or hedge futures and options with us, and you just want a market analysis and commentary, you can subscribe to our sub stack. It's at CarlyTrading.substack. We will have links in the show notes for everybody. And I just want to be very clear.
And, Carly, you can confirm this. Carly and I have no financial arrangement, correct, Carly? Correct. With friends, she's somebody who I learn a ton of stuff from.
If I ever was going to, and I don't, but if I ever was going to buy options, I don't know what an option was, Carly, you'll be very proud of me. But if I was ever going to buy options or buy contracts or anything like that, the only person that I would do that with is the CarlyTrading. And again, we have no financial arrangement. Carly's not an advertiser on the podcast.
But when Carly says like the tagline is futures options integrity, this is a person who I believe that about. I believe in her integrity. So if you are looking for somebody, I would trust her enough to send you to her. And that's why we've got Carly here to talk to us about this stuff.
Because it is not some small thing to give a couple of hours of your Saturday morning to help us understand this stuff. So I really appreciate your time, Carly, especially on the weekend. And we're going to get into some really interesting stuff now. So I want to understand, in this episode, what was different about Coffee Futures in 2025?
Because to all of us in coffee, this felt like an insane year. And the majority of us don't have anything, like we're not trading on the futures market. What was different about this year? It was absolutely insane.
So you're right on the target there. The coffee market was kind of putting on a clinic of volatility. It's just been really, really wild. What you may or may not have noticed is it wasn't just coffee.
There was a handful of markets that experienced this. And the craziest thing about it is these handful of markets are seemingly completely unrelated. Yet they were trading in the same direction almost every day. Really?
Yeah, so let me kind of explain that. Live cattle and theater cattle features, so livestock features, which is basically beef, gold. And Bitcoin, to a certain extent, tech stocks and coffee were all correlated. At one point this year, this is kind of broken here in the last month or two.
But at one point, they were all moving in the same direction on a daily basis, any other set of the time. So what this tells me, and I don't, like if you think about it, what the heck does cattle, coffee, gold, tech stocks have to do with each other? They really don't. In no reasonable planet.
Well, those assets may be moving together as if they're the same commodity, it's crazy. So what this tells me is there's a couple of things. Now, obviously a lot of the buying in these particular asset classes, it's triggered by a fundamental story. There's some real reason that prices are going up.
But within what happens is, when you're targeting markets that are trending, you get algos, so like the computer traders, you get people trying to hedge inflation or people just momentum trading, like we've seen some really silly things in the stock market. People buying things just because they're going up. So that's kind of helped these particular assets go probably further than what they normally would have gone. And I think the real simple, none of this assemblers, lots of moving parts, for a lot of reasons.
But in my view, and I actually really underestimated this. Unfortunately, I can't go back and rethink it, but I should have saw this coming. Because in 2020, when the pandemic hit, the US printed a massive amount of money, actually central bankers around the world did that. In the US, we grew our money supply, like the entire, I'll just kind of keep it simple.
The entire supply of money, meaning like cash on hand, bank account, like very liquid money, savings accounts, checking accounts, that sort of thing. That cash balance in the US increased by about 40% in two years from 2020 to 2021 to 2020. That should never happen. I mean, I know there was circumstances that people felt maybe that was needed, but I underestimated how long it would take all that money to go through the system.
And so I think what you're seeing, and I'm not saying this is the reason coffee went up, I'm saying this is the reason coffee went up and the way it did, and the way it was as volatile as it was. And you can say the same thing for gold, Bitcoin, all of these things I just mentioned. There's so much money in the system. Eventually that money makes it to the markets.
And it's because it's changing hands between people, some people spend it, some people save it, eventually it all lands into savers hands. And those people really only have a handful of assets they can buy, right? If they want to invest it, they don't want to put in a bank account, they want to do something with it. They all, for whatever reason, it's kind of the world we live in because social media, everybody's trading stocks and commodities on their phone now.
They pull up their phone, they see a heat map, they say gold's up today, they hit the buy button. So everybody's buying the same five assets in the stock market. It's the same seven stocks. The whole world is buying the same thing just because it's going up.
And so in my opinion, literally just simple as too much money, chasing too few goods, and it allowed things to get out of control. And I think that's really a big part of what we saw. So if I understand it correctly, there's a lot of money that's in the system. The people who have the money are trying to use that as a functional asset, right?
They're trying to do something, they could go and spend it on dinner, or they could put it in a market somewhere. And because it's so easy now to do that on your phone, people are buying Bitcoin, people are buying or gambling with it, like betting against whether Bitcoin's going to go up or going to go down like that's massive. I'm reading so many stories about how we're in a gambling economy. It is terrifying, right?
Or they could put it into futures. And so they may hear from some bro that's on TikTok, hey, coffee supply is down, I saw on Bloomberg or whatever that, there's not enough coffee, I'm hearing a lot of people talk about, there's not enough coffee, you can go and buy coffee futures contracts and make some money there. And they maybe have never done that before. And so that's a new thing that they can try, they might read something on Reddit.
And so they're trying to use that money to make more money. Is that correct? That is correct. So the human nature is they don't want money just sitting idle, they feel like they're missing out on something.
If it's just sitting there, it's being wasted, it's wasted capital. In my mind, that's the exact opposite mindset, especially when we're in an environment now where assets are just wildly overpriced and probably unsustainable in most cases. So me, I'm sitting with my money, just the treasureies, and T-belts like watching everybody else, but I'm like, this doesn't make sense to me. Listen, I'm too old to deal with that stuff.
So I'm just gonna sit here quietly until everything implodes, and then hopefully I can buy something at reasonable prices. But not everybody's thinking like that, everybody's got FOMO. And it's not just that. It's also, I live in Las Vegas, everything on the strip is overpriced.
So this is kind of an extreme example. But if there wasn't so much money in the economy, the worst part about it is that money tends to make its way to the top right, it's the top 10% of the economy here, at least I can't speak for other countries. In this country, the top 10% have, they don't care about price of copies, $5 or $12, they could care less. It's everybody else that's really struggling.
But here, like if you go to the coffee shop on the strip, you're talking $12 for a latte. If there wasn't so much money, bazooka into the economy in 2020, people wouldn't be paying $12 for a latte in 2019 if you would have shown that price on your menu, people would have walked away. But it's a different environment because there's just too much money out there. And it's not money that we've earned, it's for, you created it out of thin air.
So it's a problem. I keep wondering where the fuck everybody's getting these money from. I can't thinking like, okay, great. It's not just me.
Listen, I feel like I make a pretty good living. I work really, really hard. Yeah. So I'm not leaving paycheck to paycheck, but I look at what other people are buying.
It's like, I go to a restaurant on the strip and I'm doing it as like a splurge, you know, in a cage. Yeah, it's pretty sure these people do it all the time because they've got their three kids eat like an $80 steak, each of them. And I don't understand it. I don't know where they're getting it.
But good for them. I keep looking at this stuff. Like I keep seeing all these influencers going to all these restaurants and buying all of these fancy new drinks. You know, a lot of cafes are putting out expensive signature drinks and things like that.
And I'm like, look, it's really great. And I know these influencers aren't paying for them. But these cafes are packed. At least when these influencers are there.
And I'm thinking, are people just no longer buying houses? Are they just no longer investing in their future? And are they spending that money now? And there's some evidence out there to suggest that.
Or are people just buying everything on credit? Like, you look at what some of the things they're saying about, cloner and afterpay and credit card debt. And you're like, I'm panicking. And I don't have a single credit card.
I have zero debt. And I panic watching all of this happening. I mean, we're on the same page there. I will say, so we just mentioned that top 10% are doing most of the spending in the US.
Like, I think the latest debt I saw, the top 10% are economy, is spending 50 or more percent of all the spending. So, but we also then have everybody on the MAM best majority of people on the bottom. And a big chunk of those, I think you're exactly right, are using Quarna and other type of high interest loans, which is really, really scary and really unfortunate. But I'll mention one other thing.
There's a huge wealth effect going on. We've had a lot of people, a lot of young people, really, make a ton of money being wildly aggressive in their investments. Again, I'm going to mention Bitcoin. I'll mention the MAG7, the Magnificent Seven Stocks in the US.
It's basically seven tech companies that are outperforming entire countries, which, to be honest, I'm scared. I'm skeptical. I'm not right here. I can't get any attacks.
They care about it. People are making a ton of money. And so for them, they're not paying attention to how much they're spending because they're making so much. But I'm going to bring in a personal story.
Hopefully, my family has listened to this. But I did have a family member that, during the .com bubble in late 90s, early 2000s, this person was hard working class family, and they put all of their retirement into four tech stocks or telecommunication stocks, basically. Well, it turned out, miraculously, they turned roughly, I think it was somewhere around $1.25 million, maybe $300,000 at the most. They turned that into, at one time, they were $14 million on, literally four or five times.
They would come to Vegas. They would drop hundreds of thousands of dollars in a weekend, gambling, having fun, expensive dinners, and one's reality set in the stock market. That all came crashing down. And unfortunately, they ended up with a very, very little left.
So I've seen this before. I've seen it firsthand, like my people I'm close to. So while I have PTSD from that, all these other people are writing this euphoric, euphoric, basically, printing press in this market. And for them, they can spend as much money as they want.
And they feel like it's never going to end. But it will end. The music will stop. I wish I knew it.
I don't. But that's what I think is happening. I think the wealth effect is just kind of multiplying upon itself. And a lot of these people that are making money, things like Bitcoin and stocks and whatever it is, they're doing it on leverage.
So I've talked to a lot of people for a living. I read a lot online. I go to the social media. I believe there's a big chunk of the economy that has been programmed to believe that don't pay off your house, don't pay off your car, don't even pay off your credit cards.
You buy assets, which are inflating wildly, because you can make more money in the markets than you can, that as opposed to paying, for example, you're paying 20% interest, but you're making 30% in the market. You came out ahead. You're ahead, right? So far, that math has worked.
To my surprise, that math has been working. But there will be a day it does not work. And it's going to be really, really painful and pretty catastrophic for a lot of families and maybe even the entire economy. Well, and folks for those who don't know, when we say leverage, we mean borrowed money.
So people are borrowing money. Let's say, you know, Bitcoin's a really great example, right? A lot of people borrowed money because they were told don't use your own money, go and borrow money and buy Bitcoin. And over the past, let's say, seven, eight days, Bitcoin has been tanking.
And so what ends up happening is they've used borrowed money to buy that Bitcoin. The price has gone down from, at its peak, I think it was 125,000 per Bitcoin. And now it is around 85. And so the people who borrowed money for Bitcoin have now a margin call where they are being told that they have to cover the difference between where they borrowed it at and now where it's at.
And they have to find that cash to pay it back. That is terrifying. It's pretty scary stuff. And just to add to your example.
So if they were using no margin, if they bought Bitcoin for 125,000 for one coin and they fully funded it with their own money, right now they'd be down roughly 45 grand. But if they leveraged it, even if they leveraged it only 50%, they're down 80 grand. So they might've been feeling very, very wealthy a couple of weeks ago. Now some people don't feel so, yeah, on paper, correct.
None of it shares until you sell it. I've learned that unless you sell it, it doesn't count. And that goes in both ways. So again, I think we're in the danger of getting a reverse wealth effect where everybody was spending frivolously because they felt rich because in their trading accounts they had all this money that money's not theirs unless they cashed it out and turned it into cold hard cash.
In my opinion, that's how I look at the world. And so you take all of those that paper gains away and suddenly they're not gonna be as willing to spend $12 on a coffee or $150 on a steak on the strip. Yeah. We're gonna head into the next episode folks and talk more about this with specific relation to coffee.
We're gonna talk, what are the different forces that have moved the market this year in coffee? And you know, that's things like tariffs and speculators and blah, blah, blah, blah. Now we're gonna go deep into it. So join us for the second episode of this series.
I'm already very excited, coloury, I have to say. Peace out but not bad. I have an amazing rest of your day. This episode is part of a five part series produced by Mapper Forward.
Check the full playlist and guest details in the show notes as well as how you can support our work in the coffee industry. Become a premium YouTube subscriber, explore our Patreon and any brands we've partnered with to bring you this podcast. Please don't forget to like, share and subscribe. It really does help us grow our audience.