Coffee futures ended the week at 286 US cents per pound, down 12.35 cents from the prior Tuesday, as a deteriorating risk environment weighed on prices. Most of the price movement occurred in a single session.
Iran conflict drives risk-off move
The week’s price action was shaped by the broader macroeconomic backdrop. Escalatory developments in the US-Iran conflict drove a general risk-off environment, with concerns that a prolonged conflict could result in higher energy prices, broader inflation, and weaker consumer spending. This sentiment pulled coffee futures below the $2.90/lb support level. Breaking that level is considered technically significant, as it is likely to trigger additional selling from momentum funds.
During the preceding week, the market had broadly held to a $2.90-$3.00/lb range, as geopolitically driven speculative inflows balanced against selling interest from origin.
Outlook
With near-term risk largely tied to developments in Iran, further escalation is seen as negative for coffee prices. Sucafina’s analysis points to the $2.75/lb level as a potential near-term test.
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