Coffee Market Fluctuations: Brazilian Weather and Global Supply Drive Trends

Coffee prices posted modest losses on Wednesday, stabilizing above Tuesday’s two-month lows. The market has been defensive in recent weeks, reflecting reduced concerns about drought in Brazil. Somar Meteorologia reported that Minas Gerais, the main arabica-growing region, received 31.1 mm of rain last week, exceeding the historical average. This relief in weather conditions eased price pressure, though the market remains cautious about potential changes.

This contrasts with the sharp gains seen earlier in the week when the Brazilian real’s appreciation against the dollar discouraged exports, supporting futures prices. Additionally, Vietnam’s limited supply kept robusta prices firm. Now, the forecast of reduced rainfall in the coming days raises uncertainties about Brazil’s crop recovery, which may prevent significant price declines.

Coffee market volatility continues to be driven by climate factors and global supply-demand dynamics. With low stock levels and slow sales, investors and producers are closely monitoring developments. If weather risks resurface, prices may regain strength, maintaining instability in the sector. Fonte: Barchart