Coffee Prices Below Recent Highs

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.

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.