In the world of coffee, here's what's brewing:
📉 The initial weakening of the US Dollar index has strengthened the BRL, leading investors to see it as a win-win situation. The labor market is softening just enough to keep the Fed at bay, while it remains strong enough to avert an economic recession.
🌧️ Light rains are in the forecast for most of Brazil's arabica growing regions next week. Recent rainfall has led to good blossoms in Cerrado and South of Minas. However, we'll need substantial rainfall in the upcoming weeks to induce the main arabica flowering. Keep a close eye on those weather forecasts!
☕ ICE arabica certified stocks have hit a 9-1/2 month low of 485k bags, while ICE robusta certified coffee inventories are at a 10-year low of 3.37k lots.
💹 Arabica prices saw a rally, reaching a two-week high, with system funds covering short positions. Roasters have been cautious due to slow consumer demand, but retailers are expecting price decreases and promotional allowances that might boost consumption. Keep an eye on the chart, as closing above 160 is crucial to maintain upward momentum.
📊 Support: 147.20, 143.00, 122.50
📈 Resistance: 157.65, 166.65, 173.95
🏡 In the local market, arabica futures remained in a tight range despite the weaker BRL. Coffee is available, but producers are holding out for higher prices and keeping a close watch on the flowering progress for the 24/25 crop. Commercial activity slowed down this week, with shipments continuing, particularly in conilon green beans and arabica. August may see record exports, but they still fall below expectations.
🌦️ Weather-wise, we can expect good flowering in the coming weeks following the rains in late August.
💱 In the realm of Economy/Politics, the BRL/USD exchange rate fluctuated between 4.85 to 4.94 due to a firming USD index.