After testing the 160-cent line on ICE US, coffee ended up erasing part of the gains. The rise of the dollar against the real, reflecting the Super Wednesday with decisions on monetary policy in important central banks, weighed against arabica coffee in New York. But even with the downtrend, the Dec/23 position remains far from the bottom at around 147 cents.
The market found bullish strength amid climate fears and a weaker dollar. The brief recovery of the US currency generated negative pressure against coffee prices on the futures exchange. However, the forecast of very high temperatures for the weekend in Brazil continues to raise concerns. As a result, coffee finds support above 154 cents, respecting the range between 150 and 160 cents.
The weather should remain on the radar, at least until the beginning of next week. Traders are carefully monitoring the passage of a strong mass of dry and hot air over Brazil. The highest temperatures must occur next weekend. And for coffee, the most critical regions would be northern Paraná, western São Paulo, and Minas Gerais, where in some locations highs can reach 40 C. Minimum temperatures should also be well above average, generating a pocket of heat that should last until the end of September. This extreme situation can cause thermal stress in coffee crops, which generates apprehension and the search for climate protection in the market. The rains should return to coffee areas at the end of September, but they should only gain regularity and intensity in October.
