Where Are Arabica Coffee Futures Heading? – CoffeeTalk

Arabica coffee futures were the best-performing soft commodity in Q3 2024, posting an 18.04% gain. ICE Arabica coffee futures moved 43.52% higher over the first nine months of 2024, with a move above the $2.6045 technical resistance potentially propelling coffee futures to challenge the $3 per pound level for the fourth time. The market’s bullish trend has taken the soft commodity from the May 2019 87.60 cents per pound low to the September 2024 $2.7505 high.

Brazilian growing conditions have created supply concerns, as the move to the highest price in thirteen years occurred due to adverse weather conditions in Brazil. Brazil produces 39% of the world’s annual coffee bean supplies, making the South American country the leading producer and exporter. Vietnam is second, with 17% of the 2023/2024 coffee production, specialized in producing Robusta beans.

While ICE Arabica coffee bean futures rose to the highest price in thirteen years in September 2024, ICE Robusta bean prices reached record highs. The long-term chart of ICE Robusta coffee bean futures trading in Europe highlights the rise to $5,575 per metric ton. Arabica futures were 18.04% higher in Q3 and 43.52% higher over the first nine months of 2024, while Robusta futures posted an over 37% Q3 gain and a 93.5% rise over the first three quarters of 2024.

The upside target in the ICE Arabica coffee futures market is the $3 per pound level. The long-term chart dating back to the early 1970s shows that the price rose over $3 per pound in 1977, 1997, and 2011, making a series of slightly lower highs from the 1977 record $3.3750 high. If Brazilian coffee bean production continues to decline and the weather does not cooperate, Arabica prices could follow Robusta prices, soaring to new all-time highs above $3 and challenging the 1977 $3.3750 per pound peak.

There are limited choices for market participants seeking coffee price exposure, as the NIB ETN product ceased trading in June 2023. Arabica coffee futures and futures options trade on the Intercontinental Exchange in the U.S., and Robusta futures and futures options trade on the Intercontinental Exchange in Europe.

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