July Arabica coffee traded on Wednesday closed up 0.90 cents/pound and Robusta coffee closed up $36 at $3,414/ton.
Although it did not close at the highest level of the session, this was a trading session that was considered a success for the bulls, when coffee prices in both markets increased in reverse after selling sessions that caused prices to rise. was quite deep.
Dry conditions in Brazil have not improved during the preparation period for Arabica coffee harvest.
Inventories of certified Arabica coffee on the New York Exchange continue to gradually increase daily, rising to 14,465 bags yesterday, reaching 701,423 bags.
Note that the historic high inventory level for certified Arabica coffee on the New York Exchange was 5,111,858 bags on September 10, 2004.
The number of daily registrations to the exchange can be interpreted as a bearish factor for the market, indicating an improvement in the flow of coffee to consumers.
The price difference compared between the two markets is currently at 43.43 cents/pound with the lower part belonging to the Robusta price, so within a week the price of Robusta coffee has become more devalued than the price of Robusta coffee. Arabica, last week the difference between the two was only 31 cents.
The Monetary Policy Committee of the Central Bank of Brazil will make a decision on a potential interest rate cut, with the current rate at 10.75%. It is widely expected that the central bank will cut interest rates by another 0.50%, which would be the seventh consecutive rate cut in as many months.
As a result, the Real has become more valuable after the statement of the Central Bank of Brazil and with the announcement of the US National Reserve Board yesterday on the decision to not change, not increase interest rates nor increase interest rates. caused the USD index to drop slightly. The market recognizes that both of these things have helped reduce coffee prices under further downward pressure.
Vietnam’s domestic market has also become more stable after panic selling when the market dropped sharply in recent times. This morning, the Central Highlands provinces issued buying prices higher than last night’s increase on the London market.
Kinh Vu (giacaphe.com)
