The Market Update explores how this week’s news, weather and other factors are shaping the global coffee trade.
Another wild week in coffee as it rallies hard — trading from 384.00 to 424.00 in the week. An aggressive punch higher without any real news.
The commentary of a potential “dry” spell in Brazil seems flimsy with rain forecasted for this coming weekend. The overall S&D situation remains tight.
Deeper issues with the financial implications of Tariffs will certainly impact how importers and roasters can operate.
However, this recent rally looks Spec driven. An upside target would be the recent coffee highs of 440 if the bull trend continues.
Differentials remain firm where offered. Peru is slowly shipping out the balance of its harvest. Colombia remains busy with current crop. The remainder of Centrals are quiet on new crop offers as they seek clarity or potentially wait for higher differential opportunities.
Stocks remain small and strong demand for spot coffee continues.
Planning or having coverage continues to be key. This will become increasingly important relative to the deepening market inversion. Now 1895 Z/H, the ability to carry spot long stocks decreases as the inversion widens. Forward planning will be key to secure supply.
—Neil Barwick, Managing Director
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