Arabica coffee futures jumped more than 2.5% to a high of US¢313/lb yesterday (the highest since May 1997), amid lingering concerns about tight global supplies. Weather concerns in top producer Brazil, along with geopolitical tensions, pushed the arabica coffee prices higher. Arabica prices have increased by around 60% this year, due to supply shortages from the top producers – Brazil and Vietnam. Despite the excellent flowering due to recent rains in Brazil, there are concerns that the flowers may not attach to the branches, which might lead to production losses in the next season. Higher exports this year due to stronger prices have reduced the stockpile and a low production next season could tighten the supplies significantly.
Meanwhile, the spread between Arabica and Robusta coffee widened to the highest level since 20 April 2023 and traded near US¢83/lb yesterday, following the sharp rise in Arabica prices. Robusta prices also moved higher recently on supply concerns in the key producers, however, they failed to match the significant gain seen in Arabica prices.
In its monthly crop monitoring Mars report, the European Commission reported that above-average temperatures and dry weather conditions in major parts of Europe helped accelerate the sowing and harvesting activities. The weather was also favourable for the recently sown crops. However, unfavourable weather conditions in large parts of Spain, some parts of Ukraine, Russia, and Italy could hamper the sowing of winter crops.
Weekly export inspection data from the USDA for the week ending 21 November shows that US corn and wheat inspections rose, while soybean exports eased over the last week. Export inspections of corn stood at 903kt, up from 873.7kt in the previous week and 419.9kt reported a year ago. Similarly, US wheat export inspections rose to 360.5kt, higher than 196.7kt in the previous week and 288.5kt reported a year ago. Meanwhile, US soybean export inspections stood at 2,102kt, compared to 2,266.4kt a week ago and 1,574.1kt a year ago.