Coffee prices hit the floor again, Brazilian farmers push up harvest, could it set up a downtrend?

Vietnam's coffee exports in June reached 140,607 tons, down 6.05% from the previous month and down 2.23% year-on-year. Accordingly, the cumulative coffee exports in the first 9 months of the current crop year 2022/2023 reached a total of 1,412,272 tons (about 23.54 million bags), down 0.16% year-on-year, according to the General Department of Customs.

World coffee prices fell across the board on both the London and New York derivatives exchanges due to new crop selling pressure from the world's largest producer and exporter.

Contributing to the decline was pressure from information about dry, favorable weather that helped Brazilian farmers accelerate the harvest of the new Conilon robusta crop, which is entering its final stage.

However, the continued decline in ICE inventories has somewhat prevented the negative trend of robusta coffee prices on the London exchange. Yesterday's ICE - London inventories report on July 11 decreased by another 2,500 tons, or 4.40% compared to the previous day, to register at 54,360 tons (equivalent to 906,000 bags), the lowest inventory level since 2016, which contributed to preventing the decline in robusta coffee futures prices at the end of the session.

Information from the Vietnam Coffee and Cocoa Association (Vicofa) predicting that Vietnam's coffee output this year will decrease by approximately 10% has also contributed to curbing the decline in robusta coffee prices.

Giá cà phê hôm nay 13/2/2023: Giá cà phê vào thế bất lợi, (Nguồn: Kitco)

Domestic coffee prices today, July 12, decreased by 100 VND/kg in some key purchasing localities. (Source: Kitco)

At the end of the trading session on July 11, the price of robusta coffee on the ICE Futures Europe London exchange turned around and slightly decreased. The price of robusta coffee futures for delivery in September 2023 decreased by 6 USD, trading at 2,570 USD/ton. The price of delivery in November decreased by 14 USD, trading at 2,422 USD/ton. Trading volume was low.

The price of Arabica coffee on the ICE Futures US New York exchange for September 2023 delivery decreased by 2.3 cents, trading at 157.55 cents/lb. Meanwhile, the price of December 2023 delivery decreased by 2.3 cents, trading at 157.00 cents/lb. Trading volume increased.

Domestic coffee prices today, July 12, decreased by 100 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	23,520	0
DAK LAK	65,900	- 100
LAM DONG	65,600	- 100
GIA LAI	65,700	- 100
DAK NONG	66,000	- 100

Unit: VND/kg.

(Source: Giacaphe.com)

The dollar fell to a three-week low after comments from Federal Reserve officials reinforced market expectations that the central bank is nearing the end of its tightening cycle. However, the Fed is expected to raise interest rates by 0.25% this month, despite data released last week showing the weakest US job growth in 2.5 years.

Market attention now turns to US inflation data due out today (July 12), with expectations for core CPI to rise 5% on an annual basis in June.

According to technical analysis of the robusta market, technical indicators are giving neutral signals, the price trend is not clear.

In the short term, robusta coffee prices are expected to fluctuate and accumulate within the range of 2540 - 2650. Robusta coffee prices need to maintain the price level of 2550 to find an opportunity to increase again and the upward momentum will be wider if robusta increases beyond 2650. On the contrary, it is necessary to pay attention to the price range of 2535 - 2540, if it falls below this range, robusta coffee prices may establish a downward trend again.

On the Arabica floor, technical indicators all show neutral signals, the price trend is not clear. It is expected that in the short term, the price may fluctuate and accumulate within the range of 156.5 - 164.5.

Arabica coffee prices need to break above the MA10 at 162.11 and stay above this level to have a chance to recover. However, if Arabica loses the support zone near 159 – 159.5, a downtrend may be established.

Source