December arabica coffee (KCZ22) this morning is up +0.65 (+0.33%), and Nov ICE Robusta coffee (RMX22) is down -6 (-0.29%). Â
Coffee prices this morning are mixed. Â Arabica today recovered from a 3-month nearest-futures low and is moderately higher. Â Arabica prices erased their losses today and moved higher on tight arabica coffee bean supplies after ICE arabica coffee inventories Monday fell to a 23-year low of 397,999 bags. Â Arabica today initially fell to a 3-month low as beneficial weather in Brazil has aided the flowering of coffee trees and bolstered the outlook for next year's coffee crop. Â
Abundant U.S. coffee supplies are bearish for coffee prices. Â The Green Coffee Association on Monday reported that U.S. Sep green coffee inventories rose +5.2% y/y to 6,378,478 mln bags. Â
Larger coffee exports from Brazil are bearish for prices after Cecafe reported last Tuesday that Brazil Sep green coffee exports rose +7.1% y/y to 3.1 mln bags.
Robust coffee supplies from Vietnam are bearish for prices. Â Vietnam's General Department of Customs reported on Oct 7 that Vietnam exported 1.73 MMT of coffee in the 2021/22 season that ended Sep 30, a 4-year high. Â Vietnam is the world's biggest producer of robusta coffee beans.
A supportive factor for coffee prices is drier-than-normal conditions in Brazil's coffee-growing areas. Â Somar Meteorologia reported today that Minas Gerais had 13 mm of rain last week, or only 41% of the historical average. Â Minas Gerais accounts for about 30% of Brazil's arabica crop. Â
Coffee harvest pressures in Brazil are a bearish factor for coffee prices. Â Cooxupe cooperative, one of Brazil's biggest coffee producers, reported Sep 21 that Brazil's coffee harvest was 99.4% completed as of Sep 16. Â Coffee producer sales typically increase during harvest time to make space for storing their newly-picked crops. Â
Signs of smaller global coffee supplies support prices after the International Coffee Organization (ICO) reported last Tuesday that global Aug coffee exports fell -1.9% y/y to 9.9 mln bags and that global coffee exports from Oct-Aug are down -0.3% y/y to 118.86 mln bags. Â
Arabica also has support from reduced coffee exports from Colombia. Â The Colombia Coffee Growers Federation reported last Monday that Colombia's Sep coffee exports dropped -25% y/y to 820,000 bags. Â Also, Colombia's Jan-Sep coffee exports are down -6.2% y/y at 8.58 mln bags. Â Colombia is the world's second-largest producer of arabica beans.
In a bullish factor, Brazil's crop agency Conab Sep 20 cut its 2022 Brazil coffee production estimate to 50.4 mln bags from a May estimate of 53.4 mln bags as adverse weather curbed coffee yields. Â This year was supposed to be the higher-yielding year of Brazil's biennial coffee crop, but coffee output this year was slashed by drought.
In a bearish factor, the USDA, in its bi-annual report released on Jun 23, projected that 2022/23 global coffee production would climb +4.7% y/y to 174.95 mln bags, primarily due to Brazil's arabica crop entering the on-year of the biennial production cycle. Â The USDA projects that 2022/23 global coffee ending stocks will climb +6.3% y/y to 34.704 mln bags.
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