Porto Alegre, January 28 th, 2022 – The coffee market has not changed much since last week. Arabica tries to consolidate a new level of performance on ICE US, flirting with resistances and supports. The lack of fundamental novelty leaves coffee prices even more vulnerable to the financial market influence. The fact is that the March 2022 position, despite drawing a bottom above 230 cents, shows difficulty in recovering the important level of 240 cents in New York. As a result, it tries to set new frontiers after the recent rally.
The restructuration in world markets, starting with monetary normalization in the United States (cut in financial stimuli and raise in interest rates) should continue to bring volatility to global asset prices. Perhaps this process can help the coffee market to break this sideways logic of the first weeks of 2022. It is also important to be aware of geopolitical tensions, especially the crisis between Russia and Ukraine, given its influence on oil prices, which directly affects the CRB index and thereby affects coffee prices.
A more consistent movement in the coffee price curve should be linked to some fundamental novelty. In this case, we are talking about the size of the next Brazilian crop. Currently, there is a convergence towards preliminary post-blossoming projections. Anyway, not much new. There is indeed a big gap between the most optimistic projections and those that believe in a greater loss in the potential of Brazil’s 2022 arabica crop. The official number was closer to the most optimistic, in the case of arabica, which surprised the market.