Friday 12 July 2024
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Coffee futures prices slightly higher on weather concerns, Deutsche Bank downgrades JDE Peet’s to hold from buy

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MILAN – Arabica coffee futures edged higher Wednesday on renewed concern that excessive rain in Brazil’s coffee-growing areas will delay the completion of its coffee harvest, currently in its final stage. December Arabica coffee in New York rose 35 points to $1.538 per lb. November Robusta coffee futures rose slightly to end the day $2,456 a ton.

According to Somar Meteorologia, the state of Minas Gerais, Brazil’s biggest Arabica producer, received an amount of rainfall, which was three times the historical average. It should be noted, however, that the latest forecasts announce hot and dry weather until the middle of the month.

Falling coffee inventories are also supportive of prices. ICE Arabica certified stocks dropped Wednesday to a 9-1/2 month low of 467,919 bags. ICE-Robusta coffee inventories last Thursday fell to a record low of 3,374 lots (data history back to 2016), to recover slightly this week.

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund decrease their net short position by 7.23% within this market over the week of trade leading up to Tuesday 29th., to register a new net short position at 32,455 Lots.

The longer term in nature Index Fund sector of this market decreased their net long position by 3.31% within the market, to register a new net long position of 44,635 Lots on the day.

Over the same week, the Non-Commercial Speculative decreased their net short position by 10.94% within the market over the week of trade leading to Tuesday 29th. August 2023:  to register a new net short position of 27,890 lots, which is the equivalent of 7,906,691 bags.

According to the ICO, world coffee exports amounted to 10.21 million bags in July 2023, compared with 10.37 million in July 2022. Exports in the first 10 months of coffee year 2022/23 (October/22 to July/23) have decreased by 5.7% to 103.74 million bags compared to 110.03 million bags in the same period in 2021/22.

In the twelve months ending July 2023, exports of Arabica totalled 74.39 million bags compared to 81.5 million bags last year; whereas Robusta exports amounted to 49.38 million bags compared to 49.23 million bags.*

In other news, Deutsche Bank downgraded JDE Peet’s, the world’s leading pure-play coffee and tea company, to “hold” from “buy” on signs that rising coffee prices are limiting consumer demand.

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