Arabica Coffee Futures Recover After Initial Drop Amid Supply Concerns

After starting the day with a decline, the arabica coffee futures market returned to positive territory with slight gains in the main contracts. This recovery was driven by the robusta market, which has been advancing since the start of trading. The interplay between the arabica and robusta markets has been crucial for the stability and price movements in the futures market, with the performance of one market directly influencing the other.

The progress of the Brazilian coffee crop is positive so far, but there is growing concern about the final yield. Dry weather and high temperatures could negatively impact both the quantity and quality of the coffee produced. Additionally, uncertainty about the next Vietnamese crop, which will only start in November, adds an element of volatility to the market. Analysts predict that this volatility will continue in the medium term as the market adjusts its expectations and reacts to available information.

According to the latest analysis by Escritório Carvalhaes, the fundamentals of the coffee market remain unchanged, with increasing concerns about global supply. The anticipated drop in Brazil's coffee production for the 2024/2025 crop is almost a certainty in the market, keeping participants on high alert. These concerns about global supply not only heighten price volatility but also underscore the need for constant monitoring of weather conditions and crop projections in key producing countries.

Source: Notícias Agrícolas