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If you're ready to amplify your brand's voice and connect with the right people and you share Map Forward's brand values, email us at [email protected] or DM us on social media. Check the show notes for all the details and let's conspire to each other's success today. Welcome to the Daily Coffee Pro by Map Forward friends. I'm your host, Lee Safar, and we are back for episode four of a five-part series, a really fantastic five-part series, with Carly Garner from the Carly Trading.
Our theme for this series is what's happening with commodities in 2026. When we had a similar conversation in 2025, it was all about volatility and this idea that volatility would eventually work itself out. That volatility has escalated for reasons that didn't exist in 2025. And Carly has generously come back to help us understand all of the ups and downs that have been happening.
And Carly, we hit $4.40, a record price, since the last time we talked and now, or the first time we talked in 2025 and now, we have seen some huge swings, some records. We have seen coffee do things that have left people questioning the reality of the status quo. And what we saw was farmers start to question a historic base level of just above $1 a pound to when the prices went above $4 and they kind of sat there for quite some time. And they have continued to sit above $3 for quite some time, even though they did touch below $3 for the last few weeks.
Now, they're back up above $3. Farmers are starting to think, well, hold on, for more than a year now, you guys have been paying above $3 a pound for coffee on the C market. That's a C price. That's the floor price that's been set.
And so people are wondering, what happens next? What does the rest of 2026 hold? Because farmers are, and it's not just farmers, it's exporters, it's everyone involved in the beginning of the supply chain, what they're trying to understand is like, okay, we know you can now pay this. You've struggled to pay, but we're no longer subsidising the price of coffee.
And to your point in the last episode, we might start to see some demand destruction that happens if the price continues to stay higher, because now we're seeing crises stacked on top of crises. That's driving inflation, higher energy costs, etc. etc. and supply problems, etc.
etc. In your mind, where does this start to shift if we look in the short term of 2026 and then into the second half of 2026? Well, I'll start by saying that, you know, everybody, regardless of their business or what they're selling, they need to know their worth. And so, you know, if you're growing a superior product, don't sell it for the standard price, you know, know what you're worth.
That's all I can say. I charge more than a lot of people in my business, and, you know, people can choose to either do business with me or not. And that's, you know, so there's a premium if you offer a premium product. So with that said, if we're talking about commercial coffee, I do think that the upside is limited.
There is a, well, and I'll also say one other thing. I have had the opportunity recently to speak to a lot of roasters, and you're right, a lot of them were able to pay the high prices the last couple of years, but I can tell you there, I think there's a lot of pain, and I think, I don't think they would be able to continue to pay those prices for much longer, is my assessment on the situation. Now, it's not up to me or them, it's up to the, you know, the market. Again, the buyer is the one that ultimately sets the price, not the seller.
The thing about commodity markets is, and this is a really hard pill to swallow for a lot of people because it's not fair, but the way commodities work is, it's almost always a buyer's market. So the roaster is almost always at an advantage, and it's very rarely a seller's market where it's actually the producer's advantage, and that's all commodities. It's not just coffee. It's just how it works.
And the reason is, producers are producing a product that is assumed to be standardised. So, you know, buyers can choose to buy or not to buy, ultimately. They have the, you know, they have the upper hand in the negotiation. That said, I think that the C market is probably looking at a deflationary period here, and I think it might start sooner rather than later.
If you look at the seasonal tendencies for coffee, usually we peak out somewhere around March, April, and we generally don't see any type of stability until deep into the summer. Last year, we were able to bottom out in July. There was a tariff announcement on Brazilian coffee in the US, and that was a reason for coffee, supposed reason, merit reason, for coffee to rally. And then now that we've spent the last several months working off that tariff news, and now, you know, came back to where we started from.
So I just worry this year that I don't think we're going to have any type of catalyst to stick save the market. So I believe upside is probably limited to about $3.30, maybe $3.50, but from there, I think we have a pretty good chance at trading back into the mid twos. And maybe even later in the year, we might be in the low twos. And this is what confuses people like me, because, and again, we go back to the first episode where we were talking about the difference between fundamentals and speculation, right?
Yeah. What is going to drive, I know trends and previous years and what your expectations are based on previous years, but with all of the volatility that's going on right now, can we expect this year to follow similar trend lines to previous years? I believe we can, even though, so the news is different, the noise is different, but humans behave in the same, humans are very habitual creatures. They just are.
I'm, here's what I think probably happened, and I think this is why this, this is why I think this. First of all, I'm looking at charts and seasonality and all that stuff. But from a practical standpoint, when price is got above, you know, in the high threes, low fours, this is what happens. And I see it across all industries.
Producers have a bit of a chip on their shoulder because they've, you know, kind of suffered for years and they think that, you know, this is their time to shine. And so what they tend to do is they hold back their, their supply. You know, they may have X number of coffee to sell, but they're only going to sell a little bit because they think, you know, prices are finally moving their way and it's just gonna keep going. And they get a little bit greedy.
I don't hate to use that word, but I'm not, I'm blam, I'm not blaming anybody. Listen, we're all humans. I even, I make mistakes all the time because humans are human. That's what we do.
It just happens. But producers without fail, it always happens. Their mindset changes. What I would advise people is if you're a producer and you're making decisions on how much to sell, do I sell it all?
Do I hold some back? You know, what do I do? Always remind yourself what it felt like in 2019, 2020 when prices were $1. And if you're a roaster, always make your decisions based on, well, not based on, but with the thought in your head of what did it feel like when coffee was at 430?
If you always keep those emotions in your head and remember what those times feel like, you're probably gonna make a better decision with current pricing. So again, on the flip side of that, when coffee was above 430, not only were producers probably holding back some of their supply because they were hoping for higher prices or, you know, waiting for a better pricing, roasters were panic buying, right? They were probably buying more than they needed because prices are at four today. What if they go to six, seven, you know, there was a lot of people out there calling for $7 coffee.
So if you're a roaster and you can buy four a day or 350 today, you're probably buying more than you need to stockpile. So you get those sorts of things. And then after everybody's behaved differently because prices are at $4, not $1 or $2, then that has to work its way out of the system. And as it works its way out of the system, supply comes online and the buyers have already bought more than they needed.
So we got to work Yeah, so, like, listen, I don't know what's going to happen next, but the only thing I do know is, literally the only way to survive in this environment is just, you know, protect your cash, protect yourself. Don't worry about getting rich, worry about surviving because the reality is, in commodities, the people that survive are the ones that make, you know, they're the ones that make the money. Commodities are like a, it's a type of business where everybody just kind of skates by for three or four years and tortures themselves, and then they have like two or three great years, and then they go back to, you know what I mean? So it's not, it's vicious.
It's vicious. It's an awful, awful. Like, sometimes I really question what any of us are doing here, but it's, you know, we're here. We must love it for some reason.
But it's, and it's a really, really vicious cycle. All we could do is protect ourselves and, and hope for the best. That's really all there is to it. You mentioned something in a previous episode that I want to tie to what you were just saying.
You were talking about more algos are starting to trade in futures markets and commodities. So is it possible that that will continue to accelerate and then the algos are starting going to try and, well, try, I'm not sure that that's the right word, but will they start to influence the direction of these trend lines based on what's happening geopolitically and what's happening in other markets? So the algos have been here for a long time. They've been, I mean, since 2008, 2009, they really started picking up and they've been around for a long time.
So they're, it's not new, but what is new is AI. People have decided that AI is going to, like, instead of humans programming algorithms to trade the markets, now we've got AI models programming. And the problem is, AI is, they all tend to think, you know, thinking all similarly. So it's creating the same type of systems, the same type of, type of order triggers.
And it's turning, you know, it's turning market moves into, it's exacerbating things, I guess is what I'm trying to say. So I think the difference is algos. What I will say is algos can lose money just as fast as humans can lose money. And I've seen, like, we have a, we offer a suite of algos.
I think there's like a thousand of them, and none of them that we created, but third parties have created. And I'm telling you, they're so streaky. Like you can make, you can make a ton of money in a short amount of time, or you could just lose silly money. Algos aren't any smarter than humans.
I'll just put it that way. And then you add AI to it, and I think they're actually dumber. So I, I think what's gonna happen is people are gonna realize that, uh, hold on, this isn't like guaranteed money. I'm not printing money here.
In fact, I'm ruining my life. And I think it all kind of goes away. But for now, it's here, and we're having to deal with it. So has, has AI started to have an effect?
Like, have we seen the full effect of AI in these markets yet? That's a good question. I, um... I would assume that we're probably peak AI chaos in the markets.
I think a lot of that, yeah, I think we're pretty close. And the reason being, people don't have unlimited money. So you would, you'd be surprised how many people I talk to that they're, they construct their portfolio based on AI. And I'm not saying it's a bad idea.
Like, AI is going to give you some really good guidance, but, uh, the problem is, we're outsourcing our thinking. So nobody's thinking. They're just, I put some stuff into AI and then let it, just accepting that as truth and, and go on with it. And they're probably trusting it way too much, especially if we're talking about like investments or trades.
Yeah. They trust it too much. They're not questioning it. They're not doing any other additional research.
They're just following it. And it's leading people to be into the, all the exact same strategies and assets. And I think, uh, that seems to be kind of breaking a little bit. And so, Like I said, if enough people lose money, they'll lose interest and do something else.
Again, that zap that we were talking about. Right. One of the other questions that came in the Patreon group and a general question that came from not just, it was a part of the discussion. What if this war goes beyond and this volatility continues?
Trump's got two more years after this year. So I don't see things coming down. I'm not saying that he's the only agent of chaos, but he sure the fuck is one of the top ones. I mean, He's not sitting, but he's not Biden from that perspective at all.
Um, not that Biden was any better, but what I, what a lot of us are wondering in our Patreon community is what happens if this constant volatility continues for a seventh year, uh, based on your calculations? What do you think happens in the, in the commodity markets? Well, okay. So I'll, I'll go back to the Ukraine Russia conflict.
Um, when that war first broke out, crude oil got very volatile, natural gas did, metals did, stock market did. But then, you know, literally within six months or more, the headlines just started, uh, having less of an impact. Yeah. Like the same, same headline in 2023 would have no market impact, but in 2022, all heck would break loose.
You know what I mean? And I think so we get in, people become numb to it and it just becomes dead inside and don't react to it. And, and we will get to that point. I don't know where that is, but the problem is, um, if and when we do get to that point, let's say a couple months down the road, maybe six months, there, is there something else around the corner?
That's the thing. There's a, you could bet your bottom dollar Trump's in power. I would say it seems like there might be. I think there's some things broken.
So I, who knows again, it comes down to just literally cover your butt. Make sure you don't have any loose ends out there and, you know, buckle up. That's all I could say. America seems to be directly involved in this war compared to the Russia Ukraine conflict.
And there is these fears that this might turn into a world war. We're not going to debate whether that's going to happen or not. But if something like that were to escalate and, and by all indications, and for reference sake, we're recording this on Thursday, March the 26th in Sydney, which is March the 25th in Vegas. Um, by all indications, there's some conflict whether America is negotiating with Ukraine.
Trump's seems to be very confident that they are. And the Iranians are going back and saying, bro, you're negotiating with yourself because we're not in the room with you when you're negotiating. So let's say something like this did escalate to a much wider, um, war. Does that have the potential to impact markets more?
Is that, we're in a different phase of all of this then, right? Or not? I would say yes. I mean, um, if, if other countries start involving themselves, I would say yes, it gets really ugly, really fast.
And I mean, at that point, I think the least of our worries is probably going to be coffee, right? We're talking, it could be, I mean, that'd be really tough. I don't want to think about that. I'm gonna not think about that.
Okay, perfect. We will, uh, anyone who wants to think about that, you can go and get that out yourself. Um, but for the rest of us, what we're going to do is in the final episode of this, uh, we're going to be talking about what are the best ways to prepare for the best and worst scenarios, uh, for the same market volatility of 2026. Uh, so join us for the final episode of this series.
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