by cmdtyNewswires - 33 minutes ago
Dec arabica coffee (KCZ19) this morning is up +0.25 (+0.26%), and Jan ICE robusta coffee (DFF0) is up +16 (+1.25%). Coffee prices are slightly higher on today's +0.43% rally in the Brazilian real against the dollar. A stronger real discourages export selling by Brazil's coffee producers. Dec arabica coffee fell to a 4-week low Monday and Jan robusta coffee plunged to a 9-1/2 year nearest-futures low on signs that recent beneficial weather in Brazil will boost the country's coffee yields. A coffee analyst at RR Consultoria Rural in Mina Gerais, Brazil's biggest arabica coffee growing region, said Monday after he toured Brazil's coffee farms that the arabica coffee crop has had "exceptional" flowering. Another negative for coffee prices was last Friday's report by the National Federation of Columbian Coffee Growers that Columbia's Sep coffee production rose +4% y/y to 1.1 mln bags. Abundant global supplies are bearish for coffee prices after the International Coffee Organization (ICO) last Tuesday reported that global 2018/19 coffee exports during Oct-Aug rose +9.2% y/y to 120.3 mln bags. Also, Cooxupe, Brazil's largest arabica coffee cooperative, said it expects to ship 5 mln bags of coffee this year, up +28% from last year. On the supportive side, current supplies have tightened after ICE-monitored arabica coffee inventories fell to a 1-year low of 2.26 mln bags Monday. Also, data from Brazil's Trade Ministry last Tuesday showed that Brazil Sep coffee exports fell -9.5% m/m and -10.0% y/y to 2.693 mln bags. A potential bullish factor for robusta coffee is an extremely short position held by funds. Last Friday's Commitment of Trader (COT) data showed that funds raised their short positions by 2,581 to 49,126 net short positions the week ended Oct 1, a record short position in data going back to 2011. The record short position may provide fuel for a short-covering rally.
There has been forward selling today in spite of moderately stronger Real. 4.0876 -0.0192 (-0.4675%), USDCOP is 3,450.53 +2.78 (+0.08%). Market continues to be under pressure.
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