We have of course seen an upward trend in the quantity of certified coffee. But it isn’t yet strong enough to have an impact on prices. The market reversal will continue into March/May 24, whereas the other positions have moved to a 'flat' level. Unfortunately, this isn’t a good sign.

News of a heatwave and a delay in rainfall, which raised fears of loss of production potential for 24/25, fuelled the bullish mood. But we need to be careful, as the situation is localised and not yet extreme enough to warrant fears of major production loss. In the meantime, the market is surfing on a trend where "the rise is fuelling the rise". The latest forecasts are for a record 24/25 harvest of 70+ million bags.

The market is overbought and close to a major resistance level at around $196. This zone should be difficult to break through, we will probably need confirmation of damage to the upcoming 24/25 harvest. That or anything that touches fundamentals: production, consumption, stocks. Conversely, arrival of rain could rapidly reverse the trend.

Over the next week, in Brazil (rain or no rain), we’ll be watching the Real vs US$ exchange rate and the quantity of coffee awaiting certification.