Robusta coffee futures, which have been well supported for months due to razor-thin supplies fell on Friday due to a round of speculator selling which overshadowed weather concerns in top grower Vietnam.
Robusta yields in Vietnam have dropped for a few seasons, and the outlook for the upcoming crop isn’t very good after droughts stressed coffee plants and now there has been more bad weather in Vietnam. Typhoon Doksuri recently impacted the country, but it avoided most of the important coffee growing areas. But, coffee plants are still under the risk of strong winds, which could strip cherries from coffee trees.
Despite those concerns, speculators have been reducing their long positions and that has pressured prices. It is possible that this is occurring as traders have already built up a very heavy long position, and with harvest coming up they are getting a little nervous that such aggressive bets could expose them to some large losses.
When it comes to the arabica crop, sales in top grower Brazil have been heating up, with the 2017 crop 44% sold at the beginning of the week, more than the typical, five-year average. In India, the arabica harvest is expected to get underway soon, earlier than usual due to heavy rains. An early harvest of arabica could be good for exports with Indian growers concerned over the health, and export potential of the robusta crop, which had been damaged by prolonged dry weather.
Arabica coffee futures hit a one-month high on Thursday.