Coffee prices broke above their recent trading range this week, rising 23.2 cents per pound to $396.85 on the most active contract. The breakout ended several weeks of sideways movement between $3.70-$3.90.
Supply conditions tighten
ICE-certified coffee stocks fell by 23,000 bags during the week, adding pressure to an already tight supply situation. The reduction in certified inventory has contributed to stronger nearby price spreads, indicating limited availability for immediate delivery.
Brazilian weather patterns in focus
Brazil’s main coffee-growing regions are experiencing the return of seasonal rainfall this week. Weather conditions in Brazil remain critical for market direction, as the country supplies roughly one-third of global coffee production.
The combination of tighter stocks and weather uncertainty has attracted momentum traders to the market. Analysts expect continued volatility as the market tests whether prices can sustain levels above the recent range.
Procurement implications
Food and beverage companies should prepare for increased coffee price volatility in the coming weeks. The breakout from the established trading range suggests procurement teams may face higher input costs, particularly for near-term deliveries where supply appears most constrained.
The Federal Reserve meeting scheduled for Wednesday could add additional price movement through macroeconomic flows affecting commodity markets broadly.
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