Coffee Prices Plunge with Rain Forecasts in Brazil, but Market Volatility Remains

Coffee prices closed Thursday (06) with sharp declines in international markets, influenced by forecasts of rain in Brazil. According to Somar Meteorologia, the current dry and hot weather is expected to be replaced by several days of rainfall next week, aiding the final development of coffee crops. This expectation led to a sell-off in coffee futures, pushing down prices in both New York and London. The anticipated weather shift has provided temporary relief to supply concerns, directly impacting market prices.

Despite the short-term drop, Heberson Sastre, trading desk manager at Minasul, emphasizes that the market remains supported by strong long-term fundamentals. However, financial and technical factors, along with the actions of investment funds, played a key role in the recent downturn. Additionally, Brazilian producers, facing inflation and high interest rates, are hesitant to replenish their historically low stock levels. This situation adds to market volatility and keeps uncertainty high regarding global coffee supply.

At the session’s close, arabica saw steep declines, with losses exceeding 2,000 points in major contracts, while robusta fell by more than $200 per ton. In the domestic market, prices followed the same trend, with significant devaluations in key producing regions. Coffee growers remain cautious, closely monitoring weather conditions before making further moves in the physical market. Volatility is expected to persist in the coming days as the market reassesses the impact of the forecasted rains on the Brazilian crop. Fonte: Noticias Agrícolas Cafeicultores brasileiros têm em mãos o menor nível de estoque da história - Notícias Agrícolas