MILAN – After the mid-week rally, it was a day of consolidation for the futures coffee markets: in New York, the March contract of the Ice Arabica gained another 320 points yesterday, Thursday 21 November, to close at a new all-time high of 295.70 cents. The December contract, which is now attracting minimal volume, even reached the psychological mark of $3 per pound, a level not seen since May 2011.
On the other side of the pond, the Ice Robusta contract for January delivery lost $11 to settle at $4,787.
The fundamentals picture remains unchanged, with Brazil and Vietnam struggling and positive signs on the demand side, while uncertainty over the EUR remained high.
Meanwhile, Usda also cut its estimate for Brazil’s 2024/25 crop, which is now broadly in line with last year’s.
The new report on Brazilian coffee production, prepared by the USDA’s Foreign Agricultural Service, has revised production figures downwards by as much as 3.5 million bags compared to Post’s previous May projection, and now estimates this year’s crop at 66.4 million, slightly above last year’s production (66.3 million).
The biggest revision (-2.8 million compared to the May estimate) was to Arabica production, which USDA now estimates at 45.4 million, up by just 500,000 bags compared to 2023/24.
Robusta production is pegged at 21 million bags (down 700,000 bags from May), down 400,000 bags from a year ago.
The 2024/25 harvest is expected to be smaller than initially anticipated due to a lack of rain and above-normal temperatures, worsened by the effects of El Niño. Coffee production in Brazil has been affected by erratic weather patterns, such as periods of high temperatures with little or no rain. May recorded the hottest temperatures in the past decade, with below-average rainfall. As a result, coffee fruits in several regions ripened too quickly, leading to smaller beans.
Despite this setback, the figures still reflect the impact of the positive year in the biennial cycle for the 2024/25 harvest, leading to a slight increase over the 2023/24 harvest.
USDA estimates that the crop in Minas Gerais, the top Arabica-producing state, fell by more than one and a half million bags to 31.5 million from 33.1 million last year.
The only positive trend was recorded in the Southeast, where production rose by half a million bags to 8.2 million.
On the other hand, production fell in the South-West and Mid-West, by 600,000 bags and 1.5 million bags respectively, to 17.4 million and 5.9 million.
Production in EspÃrito Santo, on the other hand, rose from 18 million to 19.7 million, thanks to the positive cycle of the Arabica crop, which reached 4.7 million, just below an all-time high of 4.8 million in 2020, while the Robusta crop was stable at 15 million, penalised by high temperatures during the critical stages of fruit development.
The USDA also lowered its estimates in São Paulo, where production nevertheless recorded a partial increase, from 5.6 to 6 million bags. Finally, production in Paraná was stable at 900 thousand bags.
In the other states, production fell slightly from 8.7 million last year to 8.4 million. Robustas are down at 6 million bags (6.4 million in 2023), while Arabicas are stable at 2.3 million.
