Coffee is a commodity that is frequently traded, and has an unpredictable price. As a commodity, coffee is used primarily to hedge against risk and to speculate on the futures market (i.e., trading in the expectation of earning a profit). Trading in coffee is done through f utures contracts, which are contracts in which you lock in the price that you will pay for coffee at a future date. The price of coffee fluctuates greatly, and in some weeks, it may rise by 8%. However, the following week, it may fall just as quickly. The fluctuations in coffee prices are not based on random chance but are primarily based on many different interrelated factors, such as the weather, disruption in shipping, and economic conditions. Many traders will find themselves blindsided by price changes that may occur because of any of these interrelated factors. Understanding Coffee Futures: Core Concepts and Pricing Mechanics Standard coffee futures contracts are created when a buyer agrees to purch...