MILAN – Coffee futures prices declined further in the first day of the week. Yesterday, Monday 30th December, New York and London recorded respectively their second and third consecutive session in negative territory. The Ice Arabica main contract lost 0.5% yesterday to settle at 321 cents, its lowest level in two weeks. Ice Robusta March contract lost 0.7% to end the day at $4,921, a three-week low.
Activity on both coffee futures markets remains limited, as is customary during the year-end holiday period, and is largely focused on book squaring ahead of the holiday tomorrow. In terms of financial fundamentals, investors are awaiting the release of the Fed’s 2025 outlook next week.
In coffee news, good rainfall was reported in Brazil, particularly in Minas Gerais, where abundant precipitation over the past week helped replenish water reserves and rehydrate soils.
Meanwhile, Ice Arabica’s certified stocks reached a new two-and-a-half year high of 991,080 bags yesterday.
Both exchanges also released their new Cot report. The New York Arabica market has seen the Non-Commercial Speculative sector increase their net long position by 9.42% over the week of trade leading to Tuesday 24th December to register a new long position of 41,753 lots, which is the equivalent of 11,836,790 bags.
The London Robusta coffee market has seen the Speculative Managed Money Sector marginally decrease their net long position by 0.36% over the same week to register a new net long position of 21,161 lots which is the equivalent of 3,526,833 bags.
The global coffee market outlook for the new year is not encouraging. Production is expected to fall in both Brazil and Vietnam.
According to some analysts, the market could be in deficit for the fifth season in a row – an unprecedented situation, which could lead to further increases in coffee prices.
For Arabica in particular, a disappointing Brazilian harvest could push prices even higher, to between 400 and 500 cents, some analysts predict.
