Coffee Futures Market News and Commentary
Sep arabica coffee (KCU19) on Tuesday closed sharply lower by -2.80 (-2.66%), and Sep ICE robusta coffee (RMU19) closed down -24 (-1.72%). Arabica coffee prices were undercut on Tuesday by the absence of frost risks in the current weather forecasts for Brazilian coffee-growing areas. July is the peak month for frost risk. Also, rainfall in the Minas Gerais, Brazil's largest coffee growing area, measured only 1.1 mm in the past week or 29% of the historical average, according to a report Monday by Somar Meteorologia. The dry weather in Brazil is allowing the quick harvesting of Brazil's coffee crop. Cooxupe on Tuesday reported that Brazil's coffee harvest was 75% completed as of July 19, well ahead of last year's comparable 56% level. Coffee prices are seeing support from tighter ICE-monitored coffee inventories, which dropped to a new 10-month low of 2,362,865 bags on Monday and remained at that level on Tuesday. A positive for robusta coffee is smaller supply from Vietnam, the world's largest producer of robusta beans, after Vietnam's General Department of Vietnam Customs on July 11 reported that Vietnam June coffee exports fell -8.6% y/y to 142,448 MT and for the first half of 2019 fell by -11.5% y/y to 919,038 MT. A negative for robusta coffee was last Tuesday's estimate from researcher Cepea for Brazil's robusta harvest this year to approach 15 mln bags, higher than Conab's estimate of 13.9 mln bags.