Tuesday 23 July 2024
  • La Cimbali

Coffee futures markets bounced back on Friday

In New York, the September contract gained 435 points to close at 230.30 cents, its highest level in a week and a half. In London, the September contract rose for the second day in a row, adding a further $32, to settle at $4,185- having reached an intraday of $4,240

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MILAN – Coffee futures markets bounced back at the end of last week. At the reopening, after the closure for the 4th of July holiday, New York returned to positive territory on Friday, following the Fourth of July holiday. The September contract gained 435 points to close at 230.30 cents, its highest level in a week and a half.

In London, the September contract rose for the second day in a row, adding a further $32, to settle at $4,185- having reached an intraday of $4,240.

Weather in Brazil and Vietnam continue to be the leading concern for traders.

In Brazil, harvesting was 58% complete as of 2 July, according to Safras & Mercado’s monitoring.

The conillon harvest is picking up pace and moving into the final quarter of work, with 76% of the production potential already reaped.

Work exceeds the same period last year (70%) and the 5-year average (73%). Robusta production appears to be below the initial expectations, especially in Espírito Santo, and Safras & Mercado is already forecasting a probable downward revision of the estimate.

The favourable climate, characterised by a lack of rainfall, has also favoured the Arabica harvest, which has now reached 50% of the production potential, compared with 43% last year and 43% in the last five years.

“The smaller bean size continues to be a major concern, which fuels noises about a possible negative correction in the total arabica output” says Safras & Mercado. “There are also reports, especially in the Matas de Minas region, of coffee on the ground, which raises concerns about quality.”

The situation remains uncertain in Vietnam, where the return of rain in recent months is unlikely to have fully mitigated the effects of the drought experienced earlier in the year.

Supplies are becoming increasingly scarce: in order to maintain a relatively sustained pace of shipments, stocks have been depleted in recent months and are now at their lowest levels, while the new harvest season is still three months away.

Adding to the latest setback for the region was Indonesia, with its exports decreasing by 67.1% to 0.2 million bags from 0.62 million bags in May 2023, reports the ICO.

Meanwhile, Vietnamese media report that domestic prices rose again last week to between 122,900 VND/kg and 124,100 VND/kg.

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