Welcome to the weekly market news covering Monday 7 February – Friday 11 February 2022 for coffee futures.

Summary

  • Arabica skyrockets on the back of lowest exchange stocks in 20 years
  • USD loses ground after Consumer Pricing Data confirming inflationary pressures

Arabica Futures Chart (NY)

Arabica futures opened the week up at 242.85 c/lb and on a firm day of trading set a bullish breakout to reach highs of 258.10 c/lb by mid-week. The market encountered a degree of selling pressure towards the close of the week, and dropped down from the Wednesday high, as long positions were liquidated to see the week close on a softer note of 251.40 c/lb. This week records the highest prices for Arabica since September 2011.

Robusta Futures Chart (Lon)

 

Robusta opened the week at 2218 $/MT, and continued its upward momentum, almost unchallenged to end to end the week at 2267 $/mt. This marks a bounce from the previous week, indicating that Robusta may in fact be due a larger breakout, following in the footsteps of Arabica prices.

Analysis

The US Dollar lost ground versus a basket of other currencies this week, after newly released US consumer pricing data revealed a significant rise, confirming the country’s ongoing inflationary pressures. The London Robusta Coffee, Cocoa, Silver, and Platinum markets were firmer at the close of the week, while the New York Arabica Coffee, Sugar, Corn, Soybean, Wheat, Gold, and Palladium markets were softer. The week closed with the US Dollar trading at 1.353 Sterling, 1.138 Euro, and the US Dollar purchasing 5.250 Brazilian Real.

Changing fundamentals have accounted for Arabica coffee to register its highest highs in years.  A mixture of the ICE Exchange registering the lowest certified exchange stocks for two decades, a continued container crisis and oil reacting to the worsening Russia-Ukraine situation have all contributed to this.

You can read more about this week’s fundamentals moving the market in our weekly Coffee Origin Weekly Digest here.

Published February 13, 2022
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