World coffee prices turned lower at the end of the week, after a session of "violent increase" in trading volume. Technical buy orders from funds and speculators pushed coffee futures prices to skyrocket...
Robusta coffee prices are still expected to increase, but the market is approaching the overbought zone at 68.43%, so there is a possibility of a downward correction. However, with the continuous decline in London inventories, the possibility of the market price returning to an upward trend is very high. ICE London inventories continued to decrease by 1,970 tons, equivalent to 2.41% compared to a week ago, to 79,640 tons.
Weather is becoming a key factor in determining coffee prices in the market. The US government’s National Climate Prediction Service predicts a 90% chance of El Nino weather conditions developing later this year, threatening localized drought in coffee-growing countries around the Pacific Rim and heavy rains in major coffee growing regions in southeastern Brazil and further west in Africa.
ICE New York inventories fell to a six-and-a-half-month low of 555,206 bags as of June 7, supporting arabica prices. A weaker US dollar is supporting arabica prices.
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| Domestic coffee prices increased sharply by 1,900 - 2,100 VND/kg in some key purchasing localities during the trading session on (June 9). (Source: praguemonitor) |
At the end of the trading session on June 9, 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 32 USD, trading at 2,728 USD/ton. The price of September delivery decreased by 24 USD, trading at 2,702 USD/ton. Trading volume increased.
Arabica coffee prices on the ICE Futures US New York floor also decreased. The July 2023 delivery period decreased by 4.2 cents, trading at 190.65 cents/lb. Meanwhile, the September 2023 delivery period decreased by 3.7 cents, to 186.65 cents/lb. Trading volume increased sharply.
Domestic coffee prices increased sharply by 1,900 - 2,100 VND/kg in some key purchasing localities during the trading session on (June 9).
Unit: VND/kg. (Source: Giacaphe.com) |
The US dollar adjusted slightly in the last trading session, as investors waited for US inflation data for May, along with the US Federal Reserve's interest rate decision to be announced next week.
Concerns about the possibility of major central banks implementing a new round of interest rate hikes while the global economy remains uncertain have caused USDX to continue to weaken, and speculative capital flows to stock exchanges and commodities have contributed to boosting the market price.
According to technical analysis, technical indicators are showing that the bullish momentum is still there. However, RSI is approaching the overbought zone at 68.43%, so there is a possibility of a downward correction. In the short term, Robusta prices are expected to fluctuate and accumulate within the range of 2640 - 2690. Robusta prices need to increase above 2690 to continue to conquer the psychological resistance level of 2700. On the contrary, if the support price zone of 2635 - 2640 is lost, Robusta prices may establish a downtrend again.
According to technical analysis, technical indicators are showing that the bullish momentum is still there. It is expected that in the short term, the price of Arabica will fluctuate and accumulate within the range of 183 - 187. Arabica coffee prices need to surpass 187 to find momentum to increase and explore the resistance level of 190. However, if the level of 183 is lost, a downtrend may be established.
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