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MILAN – Coffee futures moved in opposite directions on the two markets yesterday. In New York, the July contract marked a partial recovery (+200 points) from last Friday’s lows, closing at 344.45 cents. Coffee futures prices were close to seven-month lows in London, where the main contract (September) fell $58, to settle at $4,405.
Meanwhile, Brazil’s harvest is full swing and was 20% complete as of Wednesday 28 May, compared to 22% at the same day last year and an historical average of 21%, according to the latest update from Safras & Mercado.
The Robusta crop was 31% complete (32% last year), while the Arabica crop was 14% complete, compared to 16% last year.
Safras & Mercado expects a Brazilian crop of 65.51 million bags this year, down slightly (-1%) from the previous year. Arabica production is expected to decline significantly (-11%) to 40.46 million bags, while Robusta production is seen up by 20% to 25 million bags.
With regard to the Robusta crop optimism is growing among industry insiders. Given the good progress of the harvest, many insiders believe that production will likely exceed initial forecasts.
“Field reports indicate strong yields, and expectations are that the crop may even exceed initial forecasts,” said Jonas Ferraresso, a coffee agronomist who advises Brazilian farmers, quoted by Reuters.
“The expectation we have now is really for a larger harvest, possibly larger than the 2022 harvest, a harvest with reasonably good quality as well,” – said in an interview with Reuters Luiz Carlos Bastianello, President of Cooabriel, Brazil’s largest Conilon coffee cooperative based in São Gabriel da Palha Espirito Santo – adding that production in Espirito Santo (Brazil’s main Robusta producing state) is forecast at over 17 million 60-kilogram (132.3 lb) bags.
According to StoneX, the Robusta crop was 23.4% complete as of 26 May. Prices in London have declined as the new crop is collected, said Fernando Maximiliano, coffee market intelligence manager for U.S.-based broker.
“Robusta coffee (prices) have been falling significantly in recent weeks. This is already a sign of the arrival of this new harvest,” Maximiliano told Reuters
