March arabica coffee (KCH23) this morning is up +0.75 (+0.46%), and Jan ICE robusta coffee (RMF23) is up +16 (+0.85%).
Coffee prices this morning are moderately higher. Â Concerns that below-average rain in Brazil will curb coffee crop yields are pushing prices higher. Â Somar Meteorologia reported today that Brazil's Minas Gerais region received 56.5 mm of rain last week, or only 94% of the historical average. Â Minas Gerais accounts for about 30% of Brazil's arabica crop.
Robusta also saw underlying support from ever-tighter ICE supplies after ICE-monitored robusta coffee inventories last Friday fell to a new 4-year low of 8,101 bags. Â
Last Friday's news from the International Coffee Organization (ICO) was supportive of coffee prices after the ICO reported that global coffee exports in Oct fell -1.9% y/y to 9.87 mln bags. Â
On the bearish side for arabica, ICE arabica coffee inventories have rebounded sharply to a 2-3/4 month high of 609,267 bags last Friday from the 23-year low of 382,695 bags posted on Nov 3.
A bearish factor for robusta is ample coffee supplies from Vietnam. Â The General Statistics Office of Vietnam reported last Tuesday that Vietnam Nov coffee exports rose +2.6% y/y to 110,000 MT and Jan-Nov coffee exports were up +10.2% y/y at 1.54 MMT. Â Vietnam is the world's biggest producer of robusta coffee beans.
In a bullish factor, the USDA's Foreign Agriculture Service (FAS) on Nov 22 cut its Brazil 2022/23 coffee production forecast by -2.6% to 62.6 mln bags from a prior estimate of 64.3 mln bags. Â Meanwhile, Brazil's crop agency Conab on 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.
Smaller global coffee exports support coffee prices after the Colombia Coffee Growers Federation on Nov 4 reported that Colombia's Oct coffee exports fell -5% y/y to 942,000 bags. Â Colombia is the world's second-largest producer of arabica beans. Â Meanwhile, Cecafe reported on Nov 17 that Brazil's Oct green coffee exports fell -2.9% y/y to 3.18 mln bags.
In a bearish factor, the Green Coffee Association reported on Nov 15 that U.S. Oct green coffee inventories rose +5.8% y/y to 6,320,157 mln bags.
In a bearish factor, the USDA, in its bi-annual report released in June, 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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