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MILAN – Coffee futures markets have seen a technical correction from the lows seen at the start of the month. In New York, July Arabica coffee fell to 340.85 cents on Tuesday 3 June, marking the lowest value for the main contract since late January. However, two consecutive sessions in the black sent the contract back up to 359.75 cents on Thursday, 5 June.
The upward trend continued into the session on Friday 6 June leading to an intraday high of 376.40 cents. Then, profit taking brought the rally an end, and the day closed in the red (-0.5%) at 358.05 cents.
On Monday 9 June, prices initially fell, after above-normal rainfall in Brazil eased concerns about dryness in the coffee belt, but then moved higher on strength in the Brazilian real, which climbed to an 8-month high against the dollar, reports Barchart.
July closed 350 points up at 361.55 cents. September – now the most active contract – recovered 395 points to close at 359.40 cents.
Ice Robusta coffee futures also climbed back up after hitting a seven-month low on 3 June, with the contract for September delivery closing at $4,337. Like New York, London recovered over the two following days, closing at $4,445 on Thursday.
On Friday, prices rose to an intraday peak near $4,600, but then fell sharply (-2.4%) to end the week at $4,339. However, those losses were fully recovered yesterday, with the benchmark rising to $4,451.
Market fundamentals remain unchanged, with a precarious balance between supply and demand, and stocks at very low levels. Complicating matters is the approach of the southern hemisphere’s winter, which is traditionally a time of weather-related news and rumours (especially in Brazil) that influence the market between June and early August.
On the subject of weather, a new polar air front is expected to arrive in Brazil.
Although meteorologists rule out the risk of frost in the main coffee-growing regions, there will still be a significant drop in temperatures.
Last week’s rainfall, which mainly affected Sul de Minas, did not impact harvesting operations, which were 28% complete by 4 June — an increase of 8% on the previous week, according to the latest Safras & Mercado report.
This is slightly below last year (29%), but higher than the five-year average (27%).
The Robusta harvest was 40% complete, below last year’s figure of 42% and a historical average of 41%. However, it should be noted that this year’s production of Robusta is set to reach record levels.
The Arabica crop was 21% complete, which is below last year’s figure of 23%, but above the historical average of 20%. Safras & Mercado forecasts a Brazilian harvest of 65.51 million bags in 2025/26, of which 40.46 million are Arabica (-11%) and around 25 million are Robusta (+20%).
