World coffee prices tend to be mixed, maintaining a positive trend thanks to continued strong speculative capital flows into derivative commodity markets thanks to high liquidity.
Robusta coffee prices were mixed across different delivery dates, maintaining gains for September delivery, after reports of continued declines in ICE-managed inventories. According to data from the ICE reporting center, as of June 27, inventories on the London exchange fell by another 2,490 tonnes, or 3.27%, compared to a week earlier, to 73,750 tonnes (equivalent to 1,229,166 60-kg bags), continuing concerns about short- and medium-term supply shortages.
Arabica coffee prices rose. Meanwhile, Brazil's Copom is expected to cut interest rates on the Real at its next policy meeting, causing the exchange rate to rise further, prompting Brazilians to reduce coffee exports, contributing to the upward price trend.
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| Domestic coffee prices today, June 28, increased by 100 VND/kg in some key purchasing localities. (Source: YouTube) |
At the end of the trading session on June 27, the price of robusta coffee on the ICE Futures Europe London exchange fluctuated between the September and November delivery periods. The price of robusta coffee futures for September 2023 delivery increased by 5 USD, trading at 2,715 USD/ton. The November delivery period decreased by 5 USD, trading at 2,623 USD/ton. The average trading volume was high.
The New York Arabica Coffee Futures Exchange increased, the price of Arabica coffee on the ICE Futures US New York for September 2023 delivery increased by 1.8 cents, trading at 165.95 cents/lb. Meanwhile, the December 2023 delivery increased by 1.75 cents, to 165.40 cents/lb. Trading volume is high on average.
Domestic coffee prices today, June 28, increased by 100 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Supporting the bullish market trend was the statement of the President of the European Central Bank (ECB) Christine Lagarde, saying that inflation is still too high and it is too early to declare victory over the rising consumer price situation. Accordingly, the Eurozone inflation is currently at a very high level and will remain so for a very long time, so the ECB needs to raise interest rates to be able to control it for as long as possible, putting pressure on the USD compared to strong currencies.
Meanwhile, in the robusta coffee market, according to the US Department of Agriculture (USDA), Indonesia's coffee production is forecast to decrease by 18% in the 2023/2024 crop year. In addition, the USDA said that excessive rainfall disrupted the development stage of coffee cherries this season, reducing production in some Robusta coffee producing regions. This information has supported the return of Robusta coffee prices.
According to technical analysis, technical indicators are showing that the bearish momentum is still there. It is expected that in the short term, the price of robusta coffee futures for September 2023 will fluctuate and accumulate within the range of 2675 - 2735. Robusta coffee prices need to increase beyond 2730 and maintain above this price level to find opportunities to increase and recover. On the contrary, it is necessary to pay attention to the price range of 2670 - 2675, if this price range is lost, robusta coffee can establish a downtrend.
For Arabica coffee, technical analysis shows that technical indicators are still showing signs of bearish momentum. The decline of Arabica has been temporarily interrupted, but it is too early to say that the price will return to a sustainable uptrend. If this uptrend continues to be maintained well, the price may retest the 168-170 zone. And when it surpasses the 180-182 price zone, the price will have strong momentum to find an upward direction. On the contrary, 160-162 is a strong support zone for Arabica coffee prices.
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