Coffee Futures Ease on Brazil Rain Forecasts

Coffee increased to 278.40 USd/Lbs, the highest since May 2026. Over the past 4 weeks, Coffee gained 1.3%, and in the last 12 months, it decreased 12.43%.

Arabica coffee futures traded around $2.70 per pound, after touching May highs earlier in the month, supported by a stronger US dollar and signs of progress in US-Iran negotiations. The closure of the Strait of Hormuz has tightened coffee supply chains by pushing up global shipping, insurance, fertiliser, and fuel costs, increasing pressure on coffee importers and roasters. At the same time, traders are closely monitoring the El Niño weather pattern, with attention extending beyond the current harvest to its potential impact on Brazil’s 2026/27 production cycle. Coffee trader Commercial noted that El Niño could delay seasonal rains in Brazil this September and October, a critical period for tree flowering, potentially weighing on the country’s upcoming crop. Brazil’s coffee harvest for the 2026/27 season has reached 39% of the planted area as of June 17, according to Safras & Mercado, below 43% a year earlier and slightly under the five-year average of 40%.

Arabica coffee futures rose to nearly $2.78 per pound, the highest since mid-May, as concerns over Brazil’s harvest and crop quality intensified. Persistent rains in key growing regions continue to raise worries among traders about bean quality and delays in new supply reaching the market, with forecasts of further rainfall and uneven harvesting adding to the uncertainty. The market is also closely monitoring the El Niño phenomenon, with attention extending beyond the current harvest to its potential impact on Brazilian production in 2026/27. Industry analysis suggests a stronger event could delay the return of rainfall between September and October, a critical flowering period for coffee crops, potentially affecting next year’s production potential. Meanwhile, ICE-certified arabica stocks fell to 396,171 bags, the lowest level in recent years and well below 859,389 a year earlier, reinforcing expectations of tight near-term supply.