Please continue coffee discussions here. The prior thread is at the following: https://marketforum.com/forum/topic/61046/
Rich Asplund - Barchart - Tue Dec 1, 1:56PM CST
Mar arabica coffee (KCH21) on Tuesday closed down -4.85 (-3.93%), and Jan ICE Robusta coffee (RMF21) closed down -18 (-1.28%).
Coffee prices on Tuesday posted sharp losses after a 10-day weather report from Somar Meteorologia forecasted a wetter outlook for Brazil's coffee-growing regions. Coffee prices were already on the defensive from Monday when Marex Spectron said the Covid pandemic would undercut coffee demand and cause excess supply. Marex said that slack coffee demand due to the pandemic would boost the 2020/21 global coffee surplus to 7 million bags, more than double an August projection of 3.2 million bags.
Tuesday's data from the International Coffee Organization (ICO) was mixed for coffee prices. The ICO said global Oct coffee exports rose +3.2% y/y to 9.672 mln bags, but global coffee exports from Nov-Oct fell -3.7% y/y to 127.495 mln bags.
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Indeed, the models show a wetter than normal first half of Dec. coming just after an overall dry 10 or so days. So, that is a believable reason. With the recent sharp rise, that apparently lead to major profit-taking/stops being hit, etc. as even down here KC is still up substantially vs where it was a month ago.
Regardless, what I've recently learned is that the significant damage to the overall crop size is already done from the drought/heat in the form of fewer cherries. But good rains in Dec+ would fend off additional damage as it would allow the cherries that do exist to fill better. This kind of sounds like the filling of corn in August.
Another excellent report Larry.
Thanks for getting a new thread started too.
Previous coffee thread with award winning posts from WeatherFollower!
https://www.marketforum.com/forum/topic/61046/
The models, as you have noted several times recently have over forecast rains amount. The GFS Ensemble(just out 18z run below) has massive rains for parts of coffee land. Even a 10 inch contour. That would be too much rain in 2 weeks if it occurred but if those amounts verified, they would make a substantial dent in the drought and help to restore soil moisture. There is the likelihood for some damaging flooding if these rains go up another category!
But when you are still in a major drought, that is not going to be the interpretation this far out.
The latest model run actually has a bit less than the one from 18 hours ago(2nd map below)
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