Brazil shipped more coffee in August than in any August on record, for both Arabica and Robusta, and the price barely changed. The most active December contract fell 0.8 US cents per pound over the week to finish at 290.5 US cents, according to Sucafina’s latest coffee report.
The week was less quiet from the inside. Prices dropped to a low of 282 cents on Thursday, close to the 280 level Sucafina had expected as better weather in Brazil shifted sentiment, and then found more significant support and recovered. That support did not come from the coffee market.
Renewed inflation worries and fears of escalation in the US conflict with Iran lifted commodity prices broadly last week. Crude oil led the move, trading above $100 a barrel. Coffee had spent most of the period heading lower, which left it looking like a well-priced contract for investors who wanted an inflation hedge.
The coffee headlines themselves stayed bearish. August shipments out of Brazil were a seasonal record for both Arabica and Robusta, and for Arabica the only recent month that came close was during the record 20/21 crop. Sucafina reads that as availability spilling out of an overflowing Brazil into the rest of the world, where inventories still need refilling.
That leaves the next few sessions hanging on what happens outside the coffee market rather than inside it. Sucafina expects price action to be mostly macro-dependent and puts the likely range at 285 to 295 US cents per pound. Vesper’s coffee coverage, contributed by Sucafina, tracks the shipment and inventory data behind that call.
