Coffee Prices Slightly Lower On Reduced Frost Risks In Brazil

Coffee prices Monday closed slightly lower after updated weather forecasts removed the chances for frost in Brazil next week.  Climatempo said Monday that another cold front is expected to move into Brazil next week, but it should be milder with no frost risk.

July arabica coffee fell 0.3% to $2.1535 per lb​​. July robusta coffee fell 0.8% to $2,039 a tonne.

Another bearish factor for coffee prices was last Friday's projection from Rabobank for the global 2022/23 coffee market to revert to a surplus of 1.7 mln bags compared with a deficit of -5.1 mln bags in 2022/22.  Rabobank expects Brazil 2022/23 coffee production to climb +14% y/y to 64.5 million bags.  Also, the war in Ukraine and China's Covid lockdowns are expected to temper global coffee demand.

Losses in arabica Monday were limited after the Brazilian real rallied to a 1-month high against the dollar.  A stronger real discourages export selling by Brazil's coffee producers.

Last Thursday, coffee prices were undercut when Conab raised its estimate for Brazil's 2022 coffee crop by +12% to 53.4 mln bags from a previous estimate of 47.7 mln bags.