World coffee prices, especially robusta, reversed and fell after the previous overheating session, as expected by the market.
This decline was contributed by new crop selling pressure from the world's largest producer and exporter, Brazil. Information about dry and favorable weather has helped Brazilians boost the harvest of new crop Conilon robusta coffee, which is in the final stages of the harvest, and the peak harvest of the Arabica crop, combined with the decline of USDX, which is the main reason for the coffee derivatives floors to return to a weakening trend.
However, the decline was somewhat eased by concerns about supply shortages and forecasts of Vietnam's coffee output in the harvest season at the end of this year. According to the forecast from the Vietnam Coffee and Cocoa Association (Vicofa), supply from Vietnam will decrease by about 10%.
Furthermore, concerns about supply shortages from the ICE – London inventory report on July 10 remained, as it fell by another 3,020 tonnes to stand at 56,860 tonnes, a more than 1-year low.
According to the National Coffee Federation (FNC) of Colombia, coffee exports in June reached only 748,000 bags, a sharp decrease of 20.34% compared to the same period last year. Therefore, the cumulative exports in the first 9 months of the current crop year 2022/2023 from this source only reached 7,808,000 bags, a decrease of 16.76% compared to the same period last year, which contributed to the decline on the arabica floor in New York.
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| Domestic coffee prices today, July 11, decreased by 600 - 700 VND/kg in some key purchasing localities. (Source: Amazon.com) |
At the end of the trading session earlier this week (July 10), the price of robusta coffee on the ICE Futures Europe London exchange increased sharply. The price of robusta coffee futures for September 2023 delivery decreased by 45 USD, trading at 2,576 USD/ton. The price of November delivery decreased by 39 USD, trading at 2,436 USD/ton. The average trading volume was high.
Arabica coffee prices on the ICE Futures US New York exchange for September 2023 delivery continued to adjust slightly, up 1.05 cents, trading at 159.85 cents/lb. Meanwhile, the December 2023 delivery decreased 0.75 cents, trading at 159.3 cents/lb. Average trading volume.
Domestic coffee prices today, July 11, decreased by 600 - 700 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Technical analysis on the robusta floor, technical indicators are giving neutral signals, price trend is not clear.
In the short term, robusta coffee prices are expected to fluctuate and accumulate within the range of 2600 - 2650. Robusta prices need to increase beyond 2552 and maintain above this price level to find opportunities to continue increasing. On the contrary, it is necessary to pay attention to the price range of 2585 - 2590, if falling below this range, robusta coffee may establish a downward trend again.
In the Arabica market, technical indicators all give neutral signals with unclear price trends. It is expected that in the short term, prices may fluctuate and accumulate within the range of 156.5 - 164.5.
Arabica coffee prices need to break above the MA10 at 162.40 and stay above this level to have a chance to recover. However, if Arabica coffee prices lose the support zone near 159 – 159.5, a downtrend may be established.
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