We haven’t spent much time talking about soft commodities lately. That’s because the big trends in recent months have been elsewhere in areas like metals, where the momentum has been cleaner and the trends more persistent.
But let’s not forget that soft commodities have produced some of the most explosive moves of the past few years.
This time last year, right around Halloween, we talked about the sweet trade - Cocoa, Sugar, and even a short setup in Hershey $HSY.
Each year, Americans buy over 600 million pounds of candy and eat over a pound each for Halloween. While that’s frightening for their waistlines, it’s created plenty of opportunities for traders who know where to look.
Then in April, we highlighted Orange Juice futures when the price broke out of a massive base, retested it perfectly, and went on a monster run.
A few weeks later, we flipped to Sugar futures, which had just completed a massive head-and-shoulders distribution pattern and rolled over. The price is now hitting our downside target.
So while Sugar has been one of the biggest laggards lately, another soft commodity is taking the lead. Its name is Coffee.
The caffeinated commodity is breaking out of one of the biggest bases in the entire market.
On the quarterly chart, the pattern goes all the way back to 1977 - that’s nearly fifty years of resistance finally giving way.
Even Silver’s famous multi-decade base isn’t this big.
For decades, Coffee's 1977 peak has capped every major rally attempt. But that level has now been decisively taken out, and the trend that’s been slowly curving higher since the early 2000s is starting to go vertical.
Once these types of long-term consolidations resolve, the moves that follow tend to be powerful and sustained.
You can see it clearly in the chart - the black beans have spent half a century coiling beneath the same ceiling, and now that ceiling has become a floor.
The next major level we’re watching on this timeframe comes in around 5.24, which represents the 161.8% Fibonacci extension of the entire multi-decade base.
When we zoom into the daily chart, the picture gets even more interesting.
Coffee has spent all of 2025 digesting its prior gains, carving out a textbook accumulation pattern. Just yesterday, the price tried to break out to new highs, but the sellers stepped in quickly - likely a false start before the real move.
These fakeouts often come right before the true breakout, shaking out weak hands and setting up the next leg higher.
If and when Coffee futures decisively move above 4.30, we want to be long with a target of 5.24 over the coming 2-4 months.
This is the exact same target that shows up on the long-term chart. When Fibonacci extensions line up across multiple timeframes like this, our conviction in their significance is much stronger.
Fundamentally, the setup makes sense too. Global coffee supplies have been tightening due to poor weather in Brazil, the world’s largest producer.
At the same time, consumption continues to grow as coffee culture expands worldwide, particularly across emerging markets. Rising demand and constrained supply are the perfect recipe for higher prices.
So while we’ve been focused on other commodities lately, don’t sleep on the softs - especially Coffee. This market has been coiling for decades, and it looks ready to explode higher.
Last week, we dug into the VanEck Natural Resources ETF $HAP components and outlined the key levels in a global bellwether for base and industrial metals that's entering a brand-new primary uptrend. So far, this trade is working for us, so we want to go back to the well.
Today, we're outlining an oil and gas equipment and services stock that's in HAP. The stock is decisively resolving a textbook bearish-to-bullish reversal pattern, and we're betting it's about to rip more than 50%.
Premium members can see the entry and target levels below. 👇
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