The most active December coffee contract lost 18.15 US cents a pound between Tuesday and Tuesday, closing at $2.91. That takes the market through the $3.00 to $3.10 range Sucafina had expected it to hold, and the level gave way quickly rather than slowing the decline.
Brazil is what changed the picture. Rain has fallen widely across the country and September is on track to be one of the wettest starts on record. Soil moisture is ample enough to carry the trees into the 27/28 crop, and every production region is now showing a sizable, widespread flowering. Lower temperatures and more rain in the forecast mean there is no risk of adverse weather damaging that flowering at the moment.
There is also little conflict with what is left of the current crop. Sucafina’s team put the 26/27 arabica harvest at 97% complete at the end of last week. What remains is sweepings, cherries that had already fallen to the ground and are likely to be poor quality whatever the weather does, so the new flowering should have minimal effect on the last of the harvesting.
All of this landed while the market was braced for the opposite. Concern about a “Godzilla El Nino” had been the working assumption behind a firmer price, and the persistent heat in Honduras and Guatemala that Sucafina flagged last week was expected to hold the market near $3. Brazil has turned out to be the stronger signal, and Sucafina expects it to keep weighing on prices, with the market heading toward $2.80 a pound by the end of the week.
