World coffee prices reversed and fell in the first session of the week after both exchanges had increased sharply due to concerns about supply shortages with reports of continued declines in ICE inventories. Domestic coffee prices in the Vietnamese domestic market have set an all-time high.
Robusta coffee prices reached a 15-year high of $2,800 per tonne last weekend, due to concerns about supply shortages as more forecasts estimated that Brazil’s new crop of Conilon robusta coffee, currently being harvested, would fall short of expectations. However, robusta coffee prices reversed and fell again as they were deep in the overbought zone and pressured by the rising US dollar.
Inventory reports on both exchanges have dropped significantly, especially as the market is concerned that Brazil's new crop of Conilon robusta this year will be lower than expected, while the supply of robusta from Vietnam has been exhausted, and domestic roasters have to buy at very high prices to get goods.
As of June 9, the inventory of robusta coffee certified and monitored by ICE – London decreased by another 2,600 tons, or 3.20% compared to the previous week, down to 78,570 tons (equivalent to 1,309,500 bags, 60 kg bags).
Inventories on the New York ICE Futures Exchange fell to their lowest level in more than six and a half months to 550,379 bags as of June 9. This information contributed to curbing the decline in Arabica coffee prices.
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| Domestic coffee prices today, June 13, decreased by 400 VND/kg in some key purchasing localities. |
Overall, last week, the London floor had 4 sessions of increase and 1 session of decrease, the increases were very strong. The price of Robusta coffee futures for July delivery increased by a total of 153 USD, or 5.94%. Trading volume was very high above average .
The New York Stock Exchange had 3 sessions of increase and 2 sessions of decrease, the increase was also very strong. The price of Arabica coffee futures for July delivery increased by 10.35 cents, or 5.74%. Trading volume remained very high above average.
At the end of the first trading session of the week, the price of robusta coffee on the ICE Futures Europe London exchange turned down. The price of robusta coffee futures for July 2023 delivery decreased by 22 USD, trading at 2,706 USD/ton. The price of September delivery decreased by 21 USD, trading at 2,681 USD/ton. Trading volume increased.
Arabica coffee prices on the ICE Futures US New York floor also fell sharply. The July 2023 delivery contract fell 5.1 cents, trading at 185.55 cents/lb. Meanwhile, the September 2023 delivery contract fell 5.15 cents, to 181.5 cents/lb. Trading volume increased.
Domestic coffee prices today, June 13, decreased by 400 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Markets are increasingly weighing the possibility that the US Federal Reserve will maintain current interest rates as US economic indicators have not shown any significant improvement. However, the increase in unemployment claims has also raised hopes that the Fed will pause its rate hike campaign at this week's meeting.
According to technical analysis, technical indicators are showing that the bullish momentum is still there. RSI is near the overbought zone at 69.10%, so there is a possibility of a downward correction. In the short term, robusta coffee prices are expected to fluctuate and accumulate within the range of 2680 - 2750. The nearest support price zone is 2655 - 2660. If this price zone is lost, robusta coffee can establish a downward trend again.
In the Arabica market, technical indicators are showing that the bullish momentum is still there. In the short term, Arabica prices are expected to fluctuate and accumulate within the range of 190 - 195. Arabica coffee needs to surpass 195 and close at this price to have the momentum to increase to explore the psychological resistance level of 200. However, if the level of 190 is lost, a downtrend may be established.
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