Global coffee prices fell continuously as risk aversion prompted funds and speculators to continue liquidating net positions . Coffee prices entered a downward trend as the US dollar rose as investors moved capital out of derivatives exchanges to seek safe havens, following the Fed Chairman's statement at a meeting of global central bank leaders.
While New York arabica coffee prices continued to weaken technically to set a new five-month low, London robusta coffee prices continued to slide from a 15-year high hit on Tuesday, according to Barchart.com.
According to FNC – Colombia reported a 22% year-on-year increase in May exports and the Brazilian government announced a record $76 billion in funding to promote sustainable, green coffee production for large and medium-sized farmers, which prompted commodity funds to rush to trigger technical sell orders due to overbought conditions. The news sent robusta coffee prices sharply lower.
Meanwhile, after months of no change, a new batch of high-quality wet-processed Arabica coffee has been registered for auction at ICE – New York. Favorable weather in Brazil has allowed farmers to continue harvesting coffee, along with the increase in the value of the USD, contributing to pressure on Arabica coffee prices.
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| Domestic coffee prices today, June 30, continued to decrease by 400 - 500 VND/kg in some key purchasing localities. (Source: YouTube) |
At the end of the trading session on June 29, the price of robusta coffee on the ICE Futures Europe London continued to decrease sharply. The price of robusta coffee futures for September 2023 delivery decreased by 46 USD, trading at 2,570 USD/ton. The price of November delivery decreased by 47 USD, trading at 2,474 USD/ton. The average trading volume was high.
The New York Arabica Coffee Futures Exchange decreased slightly, the price of Arabica coffee on the ICE Futures US New York for September 2023 delivery decreased by 0.55 cents, trading at 161.60 cents/lb. Meanwhile, the December 2023 delivery decreased by 0.35 cents, to 160.25 cents/lb. The average trading volume is high.
In the domestic market, coffee purchasing prices continued to decrease by 400 - 500 VND/kg, accordingly, 65,100 VND/kg is the lowest transaction price in the localities, recorded in Lam Dong province.
Domestic coffee prices today, June 30, continued to decrease by 400 - 500 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Fed Chairman Powell stressed that two more rate hikes are likely this year, and he also said that inflation will not fall to the Fed's 2% target until 2025.
Money flowed away from risky assets, specifically agricultural products, including coffee on both exchanges, which were also not spared from being sold off at reduced prices.
In the robusta market, according to technical analysis, technical indicators are showing that the downward momentum is still there. It is expected that in the short term, robusta coffee prices will fluctuate and accumulate within the range of 2585 - 2680.
Robusta prices are assessed by analysts to need to increase above 2680 to have a chance to recover. On the contrary, it is necessary to pay attention to the price of 2585, if it falls below this level, robusta coffee can establish a downtrend.
According to technical analysis on the Arabica market, RSI is approaching the oversold zone. Technical indicators all show that the bearish momentum is still there. It is expected that in the short term, the price may continue to decrease to probe the support zone of 160 - 161. On the contrary, it needs to surpass the level of 164.5 to have a chance to increase and recover. With the price having decreased deeply in recent sessions, selling to chase the opening price of a new position is not recommended at this time because there may be a technical recovery correction.
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