The arrival of rains in coffee-producing areas in Brazil generates volatility in contracts in the US and UK

Last week saw significant volatility in coffee contracts on ICE Futures US and ICE Europe, due to the rains that finally fell on Brazilian coffee plantations after a long period of drought lasting approximately six months. The arrival of the rains, which Brazilian coffee growers had been waiting for, had been forecast since the end of last month, but they have not changed the fundamentals of the market – which remain the same – but they have brought more doubts and uncertainties to traders, thus contributing to the intense ups and downs of coffee prices in New York and London. These rains, which are essential for the formation of the next Brazilian coffee harvests in 2025/2026 and 2026/2027, are quite late. When they fall regularly, they should slow down the rate of damage, but they will not recover what has already been lost. From the beginning of the rainy season, it will be necessary to monitor the rainfall cycle and average temperatures throughout the spring and summer, so ...