Arabica Coffee Futures Hit 1-Month Peak

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.

Arabica coffee futures traded slightly above $2.60 per pound, the highest since late May, amid concerns over weather conditions in top grower Brazil as the 2025/26 harvest continues. A cold front remains active across the country, keeping temperatures low and raising frost risk in parts of Rio Grande do Sul, Santa Catarina, and Paraná. Recent forecasts point to heavy rainfall for the second half of June in Brazil's central-south region, which is expected to harm agricultural activity.. Meanwhile, local farmers said recent rains hindered harvesting and drying of beans, especially in regions of Minas Gerais and São Paulo. They noted that the excessive moisture, unusual for this time of year and potentially an early effect of the El Niño phenomenon, could bring diseases to the trees and affect the next crop. Meanwhile, Expocacer reported that the arabica coffee harvest in the Cerrado Mineiro area advanced significantly last week, reaching 10% to 15% of the cultivated area.

Arabica coffee futures traded around $2.50 per pound, near the lowest since November 2024, pressured by prospects of robust supply. The Brazilian harvest remains in focus, with fieldwork reportedly progressing well under dry and hot conditions, supporting the flow of new beans. This reinforced expectations of a bumper crop this season. In its latest report, the USDA projected Brazil’s 2026/27 crop at a record 71.9 million bags, up 14% from 2025/26 and above the 2020/21 level. This figure is notably higher than Conab’s official estimate of 66.7 million bags. The arabica crop is forecast at 47.5 million bags, up 25% year-on-year and near record levels seen in 2018 and 2020, marking the end of a five-year period of weaker production due to adverse weather conditions. Separately, Rabobank raised its 2026/27 global coffee surplus estimate to 9.5 million bags from 7.0 million, including 5.9 million bags of arabica.