On Monday, arabica coffee fell to a 2-week low, and robusta dropped to a 3-week low, as reduced frost concerns in Brazil sparked long liquidation in coffee futures. Ample rain in Brazil over the past week was negative for coffee prices after Somar Meteorologia on Monday said that there was 8.7 mm of rain last week, or 229% of the historical average, in the Brazilian state of Minas Gerais, the country's largest arabica-producing region.
Another bearish factor for arabica is increased supplies from Colombia, the world's second-largest producer of arabica beans. The Colombia Coffee Growers Federation reported Wednesday that Colombia Jul coffee exports rose +9% y/y to 1.229 mln bags.
In a bearish factor, the International Coffee Organization (ICO) on July 5 raised its 2020-2021 coffee surplus estimate by +12% to 2.26 million bags from its previous estimate of 2.02 million bags. Also, the ICO reported July 13 that total global coffee exports from Oct-May rose +2.2% y/y to 87.299 mln bags.
ICE arabica coffee inventories last Wednesday rose to a 1-1/2 year high of 2.190 mln bags, recovering further from the 21-year low of 1.096 mln bags posted on October 5. ICE-monitored robusta coffee inventories on May 20 climbed to a 3-3/4 year high of 16,017 lots but have since fallen to a 4-1/4 month low of 14,516 lots last Friday.
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