Arabica Coffee Futures Halt Rally

Arabica coffee futures fell nearly 8% to around $3.20 per pound, as profit-taking followed a rally to a five-month high of nearly $3.50 on July 6. The earlier advance was underpinned by weather concerns in top producer Brazil, where colder forecasts, potential El Niño-related risks, harvest delays, and tight coffee supplies triggered buying and short covering. However, updated forecasts from Climatempo pointed to mostly dry weather across Brazil's main coffee-growing regions, supporting harvest progress and easing frost concerns. Safras & Mercado reported that Brazil's 2026/27 coffee harvest had reached only 52% of the planted area by July 1, below last year's 60% pace and the five-year average of 55%, highlighting the slower arrival of new supplies.

Arabica coffee futures traded around $3.1 per pound, near levels not seen since March, as traders weighed signs of tightening inventories while monitoring the pace of Brazil's harvest. Arabica certified stocks at ICE fell by another 3,069 bags to 377,465, the lowest level since March 2024. In the same period last year, the volume was 841,173 bags, a reduction of 463,708 bags in twelve months. The market also factored in delays to Brazil’s harvest due to rainfall in major producing areas, alongside quality concerns, with investment funds increasing activity amid weather uncertainties. Coffee harvest in Brazil reached 44% as of June 24, below 51% a year earlier and the five-year average of 47%, according to Safras & Mercado. Meanwhile, Climatempo indicated that dry weather is expected to prevail in the first half of July, supporting harvest and post-harvest activities, with no forecast of rainfall as frequent as in June.

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%.