Mixed Coffee Market: Weather in Brazil and Robusta Stocks

The coffee futures market had a mixed session on Tuesday (30th), with the main contracts experiencing fluctuations between gains and losses. At the end of the day, Arabica contracts on the New York Stock Exchange showed slight gains, supported by concerns about dry weather in Brazil, while Robusta contracts on the London Exchange closed with small declines. The September/24 Arabica contract had a slight drop of 0.4 points, quoted at 230.8 cents/lbp, while the March/25 contract rose 0.15 points to 228.3 cents/lbp. In the Robusta market, the September/24 contract fell by $1, trading at $4,266/ton, reflecting downward pressure.

Weather conditions in Brazil continue to be a significant influence on coffee prices. As reported by Barchart, the lack of rain in Minas Gerais, one of Brazil's main coffee-producing regions, is supporting Arabica prices. The absence of precipitation reported by Somar Meteorologia contrasts with the historical average, heightening concerns about the impact on crops and, consequently, on future supply. This adverse climatic scenario is a factor that may limit the potential for price declines, even in a relatively well-supplied global market.

In the Robusta market, the recovery of ICE-monitored coffee stocks, which reached a one-year high, is exerting negative pressure on prices. However, this pressure is partially offset by lower exports from Vietnam, the world's largest producer of Robusta coffee. Excessive drought in the Asian country raises concerns about a possible reduction in future production, which could support Robusta prices. Thus, the Robusta market presents a delicate balance, influenced by divergent factors of supply and demand.

Source: Notícias Agrícolas