Coffee futures rose 7.8 cents Monday to Monday, with the September contract ending at $2.67 per pound as overextended short positions were forced to liquidate, exactly the squeeze Sucafina flagged a week earlier.
The physical market is where the real tension sits. Prices for high-quality washed Arabicas have stayed stubbornly high, and Colombia is the clearest example: differentials for even the most basic exportable qualities have risen above +60 US cents per pound, despite the country’s Mitaca crop peaking. Sucafina reads the dislocation between physical prices and the futures market as a sign futures may have fallen too fast, leaving farmers holding back and desperate buyers paying up.
Resolving that gap would take a large oversupply of coffee, and for origins like Colombia that is hard to achieve, since only a few origins can offer a similar premium cup profile. Add a low and dwindling ICE certified inventory, and speculative longs have reason to stay engaged in the futures market.
Sucafina’s expectation for this week: the market continues to edge higher, toward 280 US cents per pound. The full report on Vesper covers the reasoning behind that call.