MILAN – The bull run continued for Arabica coffee futures on Friday, 31st January, while Robustas experienced a slight consolidation to the downside. In the last session of January, the March contract in New York gained a further 445 points (+1.2%) to close the week at a new all-time high of 377.85 cents, having even surpassed the $3.80 mark during trading (opening at 380 cents and daily high at 381.05).
Compared to Friday 24th January, the benchmark was up 8.7%.
The Ice Robusta was slightly lower from new record nearest-futures high reached earlier in the week.
In London, the front month (March) lost $16 and closed at $5,718. The most traded May contract was down $15 to $5,694.
An backwardation market situation persists on both exchanges, with a much pronounced curve for Arabicas in New York. Meanwhile, high levels of tension and uncertainty are fuelling volatility.
In Brazil, where 85% of the 2024/25 crop has now been sold, there are concerns about low stocks and the industry’s ability to meet domestic and export demand over the next six months.
It should also be noted that Ice Arabica certified stocks fell to 867,582 bags on Friday, down from almost a million bags a few weeks ago.
However, recent events have not been all bad news. In fact, some moderately encouraging news emerged last week about Brazil’s production potential.
Indeed, there are those who believe that the next Brazilian harvest could be better than expected.
Not so much as to exceed last year’s, let alone the record harvest of 2020. But enough to make the outlook a little brighter.
‘The general comment we’re hearing is that there’s more coffee than originally thought’, said the director of a major Brazilian export company, quoted by Reuters.
‘The rain was slow in coming at the beginning, but it has not stopped since it started. It will be a good quality harvest,’ he added.
But there are those – like agronomist Jonas Ferraresso, also interviewed by Reuters – who urge caution. It is true that the crops are showing more vitality, said Ferraresso, who visited some fazendas last week. New field surveys show a crop that could be five to ten percent higher than originally assumed, he added.
‘But it will still be an average to poor harvest this year,’ he said.