Stock Recovery and Adverse Weather in Brazil and Vietnam

The futures market for Arabica coffee closed Wednesday (15) with moderate declines in the main contracts in London and New York. Eduardo Carvalhaes, from Escritório Carvalhaes, explained that the market is in a wait-and-see moment, observing whether rains will return to Vietnam and monitoring Brazilian coffee shipments. Haroldo Bonfá, from Pharos Consultoria, highlighted the breaking of an important technical support, with the drop in London impacting New York, as well as mentioning the good data from Brazilian exports and the early arrival of the Arabica harvest.

According to Barchart's analysis, the recovery of coffee stocks from historically low levels was one of the factors that moderated losses. Robusta coffee stocks monitored by ICE rose to a five-and-a-half-month high, while Arabica coffee stocks recovered to the highest level in 13 months, alleviating some pressure on prices.

Despite the stock recovery, weather conditions remain a crucial factor for the coffee market. The absence of rain in key coffee-producing regions of Vietnam and Brazil continues to cause volatility in prices. The National Meteorological Agency of Vietnam reported that rainfall in the Central Highlands was 41% below the long-term average. Additionally, Somar Meteorologia reported that Minas Gerais, responsible for about 30% of Brazil's Arabica production, has not received rain for the past three weeks. These climatic factors keep the market attentive and on high alert, directly influencing future coffee prices.

Source: Notícias Agrícolas