Coffee Hits 4-week High

Arabica coffee futures fell below $2.95 per pound, after reaching its highest level since early September, as expectations of ample supply from Brazil helped ease concerns over next year's crops. The 2026 harvest from the world's top coffee producer, Brazil, is seen at record numbers, with supply estimated at 67.6 million processed bags, up 19.6% from the previous year. Additionally, exports from Brazil in September jumped to its highest level of shippping volume in 20 months, reinforcing expectations of strong output. Meanwhile, Hedgepoint Global Markets estimates a global surplus of 8.9 million bags for the current crop year. Still, concerns over the El Niño phenomenon continue to underpin prices. With rains returning to most producing regions, growers are entering the fertilizer application period for the 2027/28 crop, although producers currently have reduced purchasing power over the input.

Coffee increased to 300.55 USd/Lbs, the highest since September 2026. Over the past 4 weeks, Coffee gained 2.72%, and in the last 12 months, it decreased 20.29%.

Arabica coffee futures surged to around $2.95 per pound, their highest since early September, partly due to quality concerns over Brazil's 2026 crop and uncertainty about the next season. Although Brazil is heading toward a record crop this year, recent heavy rainfall in the world's largest coffee producer not only delayed harvest but also affected the drying process of highest quality beans. This also means less coffee will be available to replenish depleted stocks in ICE-certified warehouses in both the US and Europe. Certified Arabica coffee stocks on ICE remain historically tight, hovering at a 27-year low in September before recovering somewhat. Meanwhile, traders continued to monitor weather conditions which could prove critical for the 2027 coffee crop as El Niño poses a potential threat. The crop is entering its flowering period, with concerns mounting over limited rainfall in key Arabica-producing areas, particularly Minas Gerais.