Arabica Prices Higher as Fundamentals Remain Bullish
CoffeeNetwork – Arabica prices on the InterContinental Exchange Arabica prices on the InterContinental Exchange are trading higher today by 1.95 based on the September contract, last seen at 183.95 with moderate volume of 23,361 contracts. The December contract was also last seen 2.00 higher at 187.10 with moderate volume of 20,501 contracts.
Arabica futures were higher today. Assessment of damage to Brazil’s coffee crop following July’s frost events is still being done, with CONAB announcing yesterday they will extend field research until later this month and other firms now out in the fields trying to determine the sizable impact. The fundamental picture for the coffee market is now significantly bullish, with the expectation that a smaller Brazil crop will mean a supply deficit and a drawdown of global stocks. Additionally, the possibility of a La Nina event in the northern hemisphere winter could mean excessive rainfall for other major coffee producers, like Honduras, which would put an even larger dent into global production. The other unknown remains global demand, which recovered as economies reopened following the pandemic lockdowns, but new COVID-19 variants could mean new restrictions and future impact to out-of-home coffee consumption. The US dollar was also lower today, further supporting to the Arabica market, despite a weaker Brazilian Real.
Robusta futures are also higher today. The market is being supported by both a lack of selling from the funds and muted sales from producers in Vietnam.
Commodities are mostly higher today as the US dollar slumped. The US consumer price inflation rate stood at 5.4 percent in July 2021, unchanged from the previous month's 13-year high
Brent Crude Oil fell 0.93% to 69.97 and Spot Gold Futures rose 1.11% to 1,748.00.
The Dow Jones Industrial rose 0.51% to 35,442.89 and the Stoxx Europe 600 Index was last seen at 474.24, up 0.41%.
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