Hello and welcome to the weekly coffee markets news covering Monday 31 January – Friday 4 February 2022.

Summary

  • Soft commodities bounce as oil hits highest prices since start of the year
  • Weaker USD supports greater buying volumes pushing both Arabica and Robusta prices higher

Arabica Futures Chart (NY)

Arabica futures opened down at 235.90 c/lb but quickly set a rising trend to reach a high of 244.60 c/lb by Friday. This gaining of momentum throughout the week indicated a bullish sentiment on the back of higher Oil markets. The market encountered selling pressure towards the close of the week which then set it on a softer path to end the session $242.65 c/lb, which nevertheless was higher than the close of last Friday at $236/20 c/lb.

Robusta Futures Chart (Lon)

Robusta opened the week on a softer note at 2175 $/MT, but from there it shook off any signs of a potential downtrend and began a strong breakout to close the week at 2225 $/mt. This is still materially lower to where Robusta was trading one month previously (2315 $/mt) and would indicate the market could still be in a downtrend, despite the stronger market sentiment this week.

Analysis

The USD has weakened over the course of the last few days, with 1 USD buying 5.32 BRL and 0.73 GBP by the close of the week. A weakening USD is more favourable for exports, which has given impetus to both the Arabica and Robusta markets to rally. Additionally, the Oil markets have been bullish this week, with Brent trading at $91 a barrel, galvanising the softer commodities, as oil has hit a year-on-year high.

Read more about this week’s fundamentals moving the market in our Coffee Origins Weekly Digest 07-02-22.

Published February 8, 2022
Categorized as Market News Tagged: