World coffee prices fluctuated, Robusta prices continued to increase, while Arabica prices decreased, right on the closing day of July futures trading in New York. Robusta coffee prices reversed after adjusting and balancing positions. The domestic Vietnamese market has had some transactions of Robusta green coffee at 70,000 VND/kg for real demand for immediate delivery.

Robusta coffee prices have been supported by the simultaneous interest rate hikes by the European Central Banks. The ICE London inventory report as of yesterday, June 22, decreased by 2,810 tons, or 3.58% compared to the previous week, to 75,590 tons, marking the sharpest weekly decline in the past two months.

The Brazilian real continued to rise by 0.06%, which has hampered coffee exports. Forecasts of favorable weather that will allow Brazilian farmers to finish their coffee crop have sent arabica prices lower.

According to Conab forecast, Brazil's total coffee output this year will be around 54.92 million bags, 7.5% higher than the bumper crop in 2022. The above information puts downward pressure on Arabica coffee prices.

Domestic coffee prices today, June 23, increased by 300 VND/kg in some key purchasing localities. (Source: Newtimes)

At the end of the trading session on June 22, the price of robusta coffee on the ICE Futures Europe London exchange increased. The price of robusta coffee futures for July 2023 delivery increased by 33 USD, trading at 2,792 USD/ton. The price of September delivery increased by 23 USD, trading at 2,749 USD/ton. The average trading volume was high.

The New York Arabica Coffee Futures Exchange continued to decline, with the price of Arabica coffee on the ICE Futures US New York for September 2023 delivery down 2 cents, trading at 170.25 cents/lb. Meanwhile, the December 2023 delivery fell 2.15 cents, to 169.05 cents/lb. Trading volume increased sharply.

Inflation in the US has cooled recently (down below 5%), but is still high compared to the 2% target. The labor market remains quite good, which is the basis for the Fed to continue to implement its tight monetary policy.

The dollar fell after comments from Federal Reserve Chairman Jerome Powell on the central bank’s fight against inflation fell short of market expectations. Powell stressed that further interest rate hikes are needed to achieve the goal of reducing inflation. The July consumer price index and non-farm payrolls will be the major events that will influence the Fed’s interest rate decision in July.

According to data from the Vietnam Coffee and Cocoa Association (VICOFA), Vietnam's robusta coffee output in the 2022-2023 crop year is estimated to decrease by 10-15% compared to the previous crop year to about 1.5 million tons due to the impact of unfavorable weather and the wave of crop conversion to fruit trees, especially durian, avocado and passion fruit.

On the robusta floor, according to technical analysis, the indicators are showing that the downward momentum is still there. RSI has left the overbought zone and is at 64.43%. In the short term, robusta prices are expected to fluctuate and accumulate within the range of 2680 - 2775. Robusta coffee prices need to increase above 2750 and maintain above this price level to find opportunities to increase and recover. However, it is necessary to pay attention to the price zone of 2695 - 2700, if this price zone is lost, robusta coffee can establish a downtrend.

According to technical analysis, the price of Arabica coffee yesterday recorded a third consecutive decline, technical indicators are showing that the downward momentum is still there. It is expected that in the short term, Arabica coffee prices will fluctuate and accumulate within the range of 169.5 - 176.5. Arabica coffee needs to overcome and maintain above the 176.5 - 177 range to have a chance to increase in price. On the contrary, the downward momentum may continue if Arabica coffee prices fall below 169.