Coffee Futures Market News and Commentary
Dec arabica coffee (KCZ20) on Friday closed down -4.50 (-3.81%). Jan ICE Robusta coffee (RMF21) closed down -29 (-2.07%).
Coffee prices on Friday tumbled to 5-week lows. An improving weather outlook in Brazil is weighing on coffee prices. Somar Meteorologia on Wednesday said that beneficial rain starting Sep 21 in Minas Gerais will lead to widespread coffee flowering and boost the yield of Brazil's 2020/21 coffee crop. The forecasts for beneficial rain in the coffee-growing areas of Brazil have sparked massive long liquidation of coffee futures by funds this week.
Losses in coffee accelerated Friday afternoon when the Brazilian real sank -2.05% to a 1-1/2 week low against the dollar. A weak real encourages export-selling by Brazil's coffee producers.
A sizeable long position by funds raises the threat of long liquidation pressure. Last Friday's Commitment of Traders (COT) report showed that funds boosted their net-long positions in ICE arabica coffee futures by... Read more