Arabica and Robusta Coffee Futures Surge Amid Stable USD/BRL and USD/COP Rates – August 21, 2024
Coffee futures saw a notable uptick today as both Arabica and Robusta prices surged, supported by stable currency dynamics and ongoing supply concerns. Arabica coffee futures (KC) on the ICE exchange closed at 250.43, marking a 0.78% rise. Meanwhile, London Robusta coffee futures (RC) were also up, climbing 0.45% to reach 4,643.00.
Arabica Coffee Outlook
The price of Arabica continued its bullish trend, boosted by ongoing supply tightness in Brazil. Despite fluctuations in the USD/BRL exchange rate, which opened at 5.4772 and remained relatively flat at 5.4781 by midday, coffee prices gained strength. The stable Brazilian real is providing some relief to local producers, but concerns about lower production levels due to adverse weather conditions continue to fuel market sentiment.
Arabica saw a daily high of 251.93 and a low of 243.63, reflecting the market’s cautious optimism. With a 0.82% rise over the past five hours, traders remain confident, driven by a strong demand outlook and weather-related uncertainties.
Robusta Coffee Outlook
Robusta futures also maintained their upward momentum, closing at 4,643.00, a 0.45% increase. The recent rally in Robusta is partly due to persistent global demand, especially from Asia, and constrained supply. Despite stronger market pressures, Robusta futures were supported by the relatively stable USD/COP rate, which hovered at 4,008.71, up 0.10% from the previous session.
Robusta traders are also responding to robust demand in the soluble coffee sector, driving prices higher. The contract reached a high of 4,657.00 today, with a low of 4,528.00. This marked a 52.86% increase in the YTD performance, reflecting the robust fundamentals supporting this coffee variety.
Currency and Market Influence While the USD/BRL and USD/COP remained relatively steady today, their influence on coffee prices is ever-present. The USD/BRL holding at 5.4781 suggests that Brazilian coffee exporters continue to benefit from favorable exchange rates, although price inflation and supply concerns are mitigating this benefit. Similarly, the USD/COP rate at 4,008.71 offers a stable backdrop for Colombian exporters, particularly as the local currency strengthens modestly.
This stability in currency markets allowed coffee prices to focus more on supply dynamics and demand trends. The impact of currencies on production costs and export profits will be closely monitored in the coming weeks as weather patterns and geopolitical tensions evolve.
