High Volatility with Climate Concerns and Technical Adjustments

The coffee market experienced another day of significant fluctuations on the London and New York exchanges this Wednesday, reflecting instability caused by global supply concerns. Initially, prices surged nearly 6% due to fears that drought in Brazil and Vietnam would harm crops. However, technical adjustments later in the day resulted in declines in future contract prices, showcasing the market's volatility amid climate uncertainties.

In New York, July 2024 futures contracts fell by 150 points, closing at 229.45 cents/lb. The declines extended through March 2025, with a depreciation of 155 points. In London, robusta coffee for July 2024 rose by $57 per metric ton, while other contracts showed smaller variations. According to Haroldo Bonfá from Pharos Consultoria, the market remains nervous about global supply concerns, exacerbated by adverse weather conditions in producing countries and a surge in domestic prices in Vietnam.

In Brazil, producers are closely monitoring the harvest progress, adopting cautious marketing strategies to balance liquidity needs with valuation opportunities. Despite the instability in futures markets, the Brazilian physical market remained relatively stable, with slight increases in some areas. In Poços de Caldas/MG, for instance, type 6 hard drink rose by 1.57%, while peeled cherry type increased by 1.50%. These movements reflect a scenario where restricted supply and high demand continue to influence prices, keeping analysts and producers focused on weather conditions and global market movements.

Source: Notícias Agrícolas