Coffee Gains Momentum on Exchanges as Dollar Drops and Stocks Decline

The international coffee market closed higher on Thursday (June 26), partially reversing the losses accumulated in recent weeks. The main factor supporting this recovery was the sharp depreciation of the dollar index, which fell to a three-and-a-half-year low, making agricultural commodities more attractive to foreign investors and triggering short covering. This movement was particularly notable in robusta, which had been under pressure at more than 13-month lows but found buying strength after news that ICE-monitored stocks fell to their lowest level in five weeks.

Even with this technical relief, analysts emphasize that the fundamental picture remains pressured by the progress of the Brazilian harvest, which is increasing the supply of arabica and conilon. Vicente Zotti, from Pine Agronegócios, explained that this greater availability has been weighing on prices in the short term, forcing speculators to reassess their positions and contributing to abrupt swings. Still, the market has shown good levels of technical support, with signs that robusta may be near a seasonal floor, while arabica still has some room to test lower prices before finding stronger support.

In Brazil, the physical market remained practically stagnant on Thursday, reflecting caution from buyers and sellers amid international volatility. Only Poços de Caldas showed some movement, though even there prices of type 6 arabica and peeled cherry coffee posted slight declines. This behavior suggests that despite the technical rebound on external exchanges, domestic sentiment remains in wait-and-see mode, anticipating more clarity about the harvest pace, demand trends, and exchange rates. In the short term, the tendency is for continued volatility, with spot adjustments driven by weather, the dollar, and global stock levels.

Source: Notícias Agrícolas