Coffee Futures Market Declines as Frost Risk Diminishes and Brazilian Harvest Progresses

The Arabica coffee futures market saw a significant correction in prices after a week that began with strong gains. Initial concerns about frost in Minas Gerais, which had driven prices up, eased as weather forecasts indicated a reduced risk of severe cold. Consequently, the major contracts in New York and London closed with sharp declines. This adjustment movement reflects a liquidation of positions in the market, as investors responded to the new, more favorable climate outlook.

Beyond the frost concerns, the market was also influenced by the progress of the Brazilian harvest, which is at an advanced stage. According to Safras & Mercado, 92% of the 2024/25 crop has been harvested, exerting additional pressure on prices due to the increased available supply. The combination of reduced climate concerns and the harvest's progress resulted in a bearish scenario for Arabica coffee, with investors adjusting their expectations in line with the market reality.

In the Brazilian physical market, prices followed the downward trend observed in the futures markets. The main trading regions recorded significant declines for both type 6 hard drink coffee and peeled cherry coffee. The sharper reductions in locations like Guaxupé and Espírito Santo do Pinhal indicate that the domestic market is sensitive to international price fluctuations, reflecting the volatility and quick adaptation to new supply and demand conditions.

Source: Notícias Agrícolas