MILAN – Lower-than-expected estimates and forecasts pushed Arabica coffee futures prices higher on Thursday, The New York contract for September delivery closed up by 200 points at 226.35 cents per lb. Prices were boosted by a report from Expocacer, a large Brazilian cooperative, according to which heat and drought had affected the development of the Arabica crop.
Analysts pointed at a new estimate from StoneX, which forecasts a surplus of 2-3 million bags for 2024/25, below USDA‘s official estimate of 5.6 million.
Insiders also cited a drop in ICE arabica inventories that occurred between Wednesday and Thursday, with certified stocks falling to 808,184 bags yesterday.
Meanwhile, weather models have ruled out the risk of frost in the Brazilian coffee belt, with forecasts showing daily low temperatures well above freezing over the weekend.
Bullish pressure has been partially mitigated by the weakness of the Brazilian real, which is at a 2-1/2 year low against the dollar.
It was the third consecutive day in the red for London futures prices, as the ICE Robusta’s contract for September delivery fell $12 yesterday to close at $4047, well off the highs reached earlier this week.
According to the most recent updates coming from Vietnam, recent rains have eased crop stress, improving prospects for the next harvest season.
There is optimism in Colombia for the 2024 harvest. According to Germán Bahamón Jaramillo – Director General of the National Federation of Coffee Growers (FNC) – production will exceed 12 million bags, recovering after years of declining yields due to the La Niña climate phenomenon.
The El Niño phenomenon, on the other hand, has had a positive effect on crops, favouring a recovery in production, which has also been supported by good prices in the international markets.
Safras & Mercado have estimated that almost 50% of the new Brazil coffee crop has already been harvested, as of the 25th June 2024, reports I. & M. Smith.
Based on their forecast for a new crop of 69.50 million bags, the report would indicate that so far approximately 34.75 million bags of the new crop coffee have been harvested, the coffee made up of around 15.78 million bags of Conillon robusta coffee, that is anticipated to come in at 23.20 million bags and approximately 19.45 million bags of arabica coffee harvested thus far, of a total estimated by Safras & Mercado to come in at 46.30 million bags.
Weather conditions are expected to remain cool and dry into the next week, which would be considered seasonally normal for this time of year.
