If you're a roaster, you've probably felt it. It's getting harder and harder to find great quality coffee at volumes and prices that still make sense. One origin that's often been overlooked in the search is Honduras. For years, it's been treated as a conventional origin, even though there are producers quietly growing exceptional coffees that never make it into the specialty conversation.
The Honduran Coffee Alliance is a social enterprise with a simple mission. Connect those producers and buyers in a fair, sustainable, and commercially viable way. They work with organized producer groups across regions like El Paraiso, La Paz, Olanchito, and Comayagua, helping them evaluate quality, tell their farm stories, and move coffees that belong on specialty menus, not buried in anonymous blends. What that looks like for rosters is previously untapped lots that hit your flavor and quality targets, a minimum of just four bags to get started, transparency reports so everyone can see where every cent of the purchase goes, and turning that first buy into a long-term trade relationship, not just a one-off.
If the idea of forming a long-term relationship with producers in Honduras is of interest to you, reach out to the Honduran Coffee Alliance so that they can work to find you a fit for your 2026 menu. Samples are going to be ready soon. You'll find Sean Warner's WhatsApp and email in the show notes. 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 Mapper Ford Friends. I'm your host, Lea Zafar, and this is episode 1 of a very timely and important five-part series with everybody's favorite, Carly Garner from The Carly Trading. Carly, welcome back to the podcast for the first time in 2026, but I suspect this won't be the only time in 2026.
Well, thank you for having me. You know, we've got to stop meeting like this. This is the only time we ever talk is when there's like a global disaster. So I would just keep giving you...
Oh, I would love to just talk about girly stuff and just normal stuff that we never get the opportunity anymore because, you know, the world is that gift that keeps on giving at the moment year on year, and it just doesn't fucking stop right now the last few years. You and I both. This is your sex, actually. Yeah, this is the sex year, six-year chaos.
Oh, Jesus. And do you think we're even close to... Where are we at? Are we in the middle?
Are we close to the end? The thing is, every time I talk to you, you ask me that, and I always think we're at the end, but it just keeps going. So, listen, I have no idea. I'm not even going to guess at this point.
Maybe this is the new normal. I hope that is not the case, but you and I both. You and I both. And we say we hope this is not the new normal every time you come on the podcast recently.
I think we do. So, folks, we're going to be talking about what's happening with commodities in 2026. You'll notice we did not say we're going to be talking about just coffee. We are talking about commodities because everything seems to be impacted by the war on Iran now.
Nothing seems to be making sense with regards to coffee and energy and cacao, and everything's, if it's possible that it could be more volatile than 2025, it is way more volatile than 2025 and doesn't seem to be slowing down because things seem to be escalating with regards to that whole thing. Carly and I, when we got on the call, were like, I don't understand anything about anything anymore. And she's like, yeah, same, same. So that creates an interesting environment for doing business.
And we're going to talk about that throughout this series. In this specific episode, we're going to ask the question, what are the different roles that fundamentals and speculation play in determining the price of commodities in futures markets? Now, Carly, I specifically wanted to start the conversation here because, like me, I suspect, and I have received a lot of feedback from our group, our Patreon community, about the fact that they're starting to really get an understanding for the very wide gap between what happens in the actual coffee industry on the ground versus what happens in the price setting mechanism that is the market and that whole world. And recently, I've been talking a lot about the fact that we differentiate the coffee industry between the specialty industry and the commercial industry, where, in fact, I think we need to separate it out in the corporate sector versus the independent sector, because from the way that I understand it, those tools that you work with as a broker in the sea market, that's where the corporate guys play.
And the rest of it is not. We don't have access to that because we can't afford access to it. So help me understand what I'm getting wrong and if I'm getting it right. Well, if we're talking about coffee specifically, the contract size is pretty big.
So it does kind of weed out some smaller producers or, you know, shops, even roasters that are running on a tight budget or smaller. The opportunities to hedge are there, but it's expensive to do, and some people... The thing about hedging is you have to kind of expect that you're going to lose money when you hedge. Like a hedge is kind of an insurance policy.
And that's really hard for people to stomach. And I get it. For some reason, like us as consumers, we pay our house insurance, our car insurance. We really know it's just sunk money and we're probably not going to ever get anything back.
And we hope we don't. And we're OK with that. But as a small business owner, myself included, I'm not in the business of buying or selling coffee, but I totally get the mindset because I'm super, super cheap with my own business. So I, you know, the thought of insuring something that may or may not help me out in the long run is a tough sell.
So I get it. I understand the mindset. But the tools are there for everybody to use. It's just a matter of choosing to use them.
And I do. It's really unfortunate that the ICE exchange hasn't listed smaller contracts so that people can do it in smaller increments and even for testing purposes. Because I found in the conversations I've had with people from your group and also people from the NCA convention a week or two ago, a big issue is they want to test things out. They want to test out the strategies, test out the market to see how their hedges can work in real time.
And the only way to do that is to play with the larger contract on the ICE exchange. And that's no fun if you're trying to learn and you're making or losing thousands of dollars in a day or two because the market's moving so fast. So super unfortunate. But I do encourage people to still utilize those tools as much as they can.
And even if it's just if you're a producer, just buying cheap puts and, you know, that way you at least have a price floor. And again, just consider it insurance against catastrophe. And you can do that for less than a thousand dollars. You know what I mean?
So you don't have to have a ton of money to do that. But it's available to everybody. It's just not. Most people don't have the mindset to participate, I think is the biggest issue.
And this is where it gets difficult, right? The price of the C market, as we call it, the coffee futures market, the price of coffee on the futures market is what sets the price, particularly at origin in one way or another, whether that's the base price with differentials put on top of it or something else. Right. And a thousand dollars is a massive amount of money for a smallholder producer in Colombia.
And that is so far out of reach. And that's the disconnect that a lot of people are trying to grapple with is. And I want to read out here, Sean Warner's. So we we invited our Patreon community, big fans of yours, Carly.
We invited them to submit questions that they could ask. And Sean Warner had an interesting one that I wanted to talk about here, which is, actually, is it Sean? Yeah. So basically, is there a good way to use the futures market while also maintaining a minimum price to producers?
Is there anything preventing us from paying the difference of the fixation and a calculation minimum for a fair price? The idea is to be able to still take advantage of the tools of the futures market while not letting it dictate to us a price that is below cost of production to producers. And this is where it leans into this idea that at origin, this thing that origin doesn't really have access to is determining the fate of the people at origin. But it can really work against them.
So sometimes like right now, it's working for them because the price has gone up quite a lot historically. But it usually and typically most of the time, and you'll actually predicting in your recent newsletter that it's actually going to go below $2 towards the end of this year. Correct. I do believe that's a pretty likely scenario.
Yes. And we're going to talk about that in one of the episodes of this series, guys. So please tuning for that. That's going to be a really great conversation.
But what thoughts do you have on what Sean's asking? So there's a couple of things to keep in mind. And these are really difficult conversations. I talk to producers all the time, not so much coffee, but, you know, corn, soybean, wheat.
And it's super, super tough because commodities are generally in a bear market. Commodities spend more time in a bear market than they do bull market. And so producers are constantly kind of at a disadvantage Of metals and crude. It doesn't really necessarily specifically relate to coffee, but it's kind of, I'll get to coffee in a second.
So we're starting to see technologies actually working against price discovery, in my opinion. We've gotten, the industry has kind of gotten into this mindset of inclusive, like we want to include everybody, regardless of how much money they have or don't have, regardless of what their, if they know anything about crude oil or coffee or natural gas, it doesn't matter if they have a stock account and they want to buy a commodity ETF, they can click a button. They can have, there's no minimum buy-in. There's no minimum holding period.
It's just as simple as you, all you need is a couple of bucks in your account, you can click the button and the money goes in and then whichever, I'll just take USO as an example. USO is a crude oil fund and anyone that buys the USO ETF, they put their money in there, it might be $10, it might be $200, it might be $2 million, whatever it is, the fund then takes that money and buys futures. And it sounds like a great idea because you're bringing participants to the market. In theory, the more participants, the more efficient pricing discovery is going to be.
But what we found is it's actually kind of the opposite because there's a lot of hot money just chasing assets. I mean, it started with some of the meme stocks a few years ago, then we started with the cryptocurrencies. And then it went into gold and silver and you know, it's kind of rotating into different assets, but it's breaking things all along the way. And it's been really hard to watch because what we're seeing is there's a lot of, for example, if we take gold, there were a lot of reasons to buy gold.
Central bankers are buying, the dollar is getting weaker, the fiat currencies are weaker. I mean, I'm not arguing that gold shouldn't have gone up, but I am arguing that gold shouldn't have probably shouldn't have gone from $3,000 to $6,500 in a very short period of time. The fundamentals didn't change. The only thing that changed is in this world we have today, everybody has access to the markets and it's electronic and it's instant and it's almost 24 hours.
So if you get the entire world with the same opinion, because everybody's going on AI, they're going on Grok, they're going on Reddit, they're whatever they're doing, they're getting all the same information. They're being told to buy the same assets. And so all that money is flowing in and it's really causing a lot of trouble with commodities. We're getting the prices that are unsustainable, causing volatility.
And really it's hurting everybody. Whether people are long or short gold, long or short silver, a lot of them came out wounded, not with money in their pockets. And that doesn't impact coffee because there's not really too many ETFs on coffee, but the algos are jumping on, when I say algos, I'm saying computer systems. So there are a lot of traders that have built computer systems that basically take keywords out of articles and out of social media.
And once these keywords hit, it tells the system to buy or sell. And so we're getting those types of things impacting markets that wouldn't otherwise be traded. I mean, there's just so many weird things going on that it's created a situation where I would agree there will be points in time where the market gets it wrong. And I think we've seen that several times in the last couple of years.
Yeah, it's more common for the market to get it wrong. And it used to be, I mean, I've been doing this a long time. I totally understand markets overshoot. Sometimes markets don't make sense.
And I can totally accept that. But the extremities, like the extremes that we've seen are so off the charts silly that it's something needs to change. Something's broken. You know, people are trying to understand this disconnect, bringing it back to speculation and fundamentals.
Growing coffee is getting harder. Food security is a legitimate problem now for more reasons than just that it is hard to grow coffee or food. This Iran conflict has added an extra dimension to that. And we'll get to that in the next episode.
But what people are really struggling with is how do we get the market, the C market to reflect more of the fundamentals so that people understand what the real supply and demand dynamic is in the C market. The good news is I think that that'll happen sooner rather than later. I don't, I mean, I'm kind of an optimistic person, so maybe I'm just totally wishing, wishing something that's not going to happen. But what I, here's my theory.
I think that every cycle that we've gone through, the speculators are starting to lose money, right? That they, crypto, they made it supposedly a lot of people made a lot of money, but then we had this flash crash in October and it kind of wiped a lot of them out because they're working on leverage. So there's a lot, same with gold and silver. People were chasing prices higher and the next thing you know, uh, we're down 20% in a couple of days.
So these types of things are, you know, people are going to learn some lessons. It's kind of like when you're a kid and you put your hand on the stove and you realize it's hot, that's going to happen in the markets. And that's kind of a natural progression. And then we'll get back to a point where things quiet down, you know, speculators have turned to, maybe they're going to go to prediction markets and you know, that gambling on games.
Yeah, it seems to be the digital right now, doesn't it? Exactly. So I, I think that, I think this will simmer down. I think people are going to be feeling so much pain that they'll say, you know what, this isn't as fun as I thought it was.
Um, so that's my hope because, and again, I'm, I'm in the business of speculation. I'm not saying speculation is bad. I'm just saying it needs to be the right kind of liquidity coming into the market. It needs to be logical.
All of us are capable of making bad decisions and missing something or being stupid. You know, I'm not saying that. I'm just saying, um, bandwagon money flowing from one asset to the other, to the other is a really, really bad precedent for market discovery. And, um, you know, the people on the, the actual supply chain feel it in many, many ways.
It's, there's gotta be a better way. My solution is, and this may not necessarily solve coffee's issue, but it'll solve some of the other stuff, is if you are going to have funds that are easy to get for speculators to get involved in, um, in their stock account. And let me actually just say this. When someone opens a futures account to speculate, they have to fill out an application that's pretty rigorous.
There's a lot of regulation questions. It's a, it's not an easy process. Like they really have to kind of jump through hoops to get it done. So there's a vetting process.
And in the, in that process, we make sure people have risk capital to play with. If they lose the money, it's not going to ruin their life. Uh, we make sure that they have some sort of experience and that sort of thing. Unlike the ETFs, which literally anybody with a phone can open it again.
Yeah. So it's just because there's such a low barrier to entry, I think it's inviting these commodity tourists and they're kind of eroding the markets is what's happening. Um, so with that said, I think one way to fix this is to basically, if someone's going to invest in the crude oil ETF or whatever it is, they should have a minimum buy-in, maybe 5,000, maybe 10,000. And maybe they have to hold it for at least a week, you know, not a couple minutes.
It should be a week, two weeks, three weeks. That way people have to think a little more about it. They should all think, and, you know, gold is the fundamentals are bullish, but are they bullish at 6,000 or are they only bullish at 4,000? You know, so the people, if they have to think about it, they're probably not going to hit the button incessantly and push the price.
Right. It's like a little zap every time. Yeah. I kind of want to encourage that behavior because when people go on a polymarket and they're saying, is Taylor Swift going to get married this year?
Yes or no? It's not really going to affect Taylor Swift. No. But if you tank the coffee futures market, that's going to affect so many people's lives in, in the real world.
And it's going to affect, do you remember the first time you came on when there were all of those suicides in coffee that were happening? And that was horrible. We, we don't want to see something like that again and that's what ends up eventuating. So people are very, very nervous right now about what's happening in Brazil and how much coffee they're going to have.
And, you know, the 2026 harvest is going to be good, but not like 2020, 2027 may be like 2020. And so if that's the case, are we going to see a return to that? But we will address that in a future episode. In the next episode, folks, we're going to talk about what everybody wants to hear about right now.
And we're going to talk about the geopolitical tensions and how they're impacting all of the commodities, including coffee and energy. So join us for the second episode of this series. Peace on peanut butter. Have an amazing rest of your day.
If you enjoyed this episode, consider supporting Mapper Forward, our guests and advertisers on social media. Subscribe, hit the like button, leave