Coffee futures climbed on Tuesday, with July ICE Arabica coffee up 7.50 cents, or 2.85%, and July ICE Robusta coffee gaining 49 dollars per metric ton, or 1.36%. Prices have risen for a second week, supported by fresh weather concerns in Brazil alongside signs that stocks are moving lower for both Arabica and Robusta.
Key takeaways
- Arabica and Robusta rose: July Arabica futures increased 2.85%, while July Robusta futures advanced 1.36%.
- Weather drove the rally: Forecasts of moderate to heavy rain in Brazil’s coffee regions are raising concerns about harvest timing.
- Stocks add support: ICE Arabica inventories fell to a 6.75-month low, while Robusta inventories were reported at a 2-year low before a rebound later in the session.
- Market is balancing supply risks and surplus expectations: El Niño-related uncertainty next year competes with forecasts for larger Brazil and global crops.
- Implications for importers: Any disruption to supply timelines could raise near-term procurement costs even as longer-run production outlooks improve.
What drove the move
Arabica’s strength came as traders weighed weather risks against improving supply expectations. The market is reacting to concerns that persistent rainfall in Brazil could delay the coffee harvest. According to Vaisala, moderate to heavy rainfall is forecast across Brazil’s coffee-growing regions this week.
Robusta also benefited from the broader coffee bid, though the supply backdrop remains mixed. The report said ICE inventories have trended lower over the past three months, which can tighten the near-term balance sheet for both varieties. ICE Arabica inventories fell to a 6.75-month low of 397,242 bags, the article noted. For Robusta, inventories were described as falling to a 2-year low of 3,631 lots on May 15 before rising to a 2.25-month high of 3,991 lots today.
El Niño risk and the next growing cycle
Beyond this week’s rainfall, traders are also focused on longer-dated weather risk tied to El Niño. The article cited NOAA estimates of a 67% probability that a “Super El Niño” develops this year, potentially among the strongest on record. It also pointed to confirmation by Japan’s Meteorological Agency that El Niño has formed across the equatorial Pacific.
Coffee traders said the pattern could delay rains in Brazil during September and October—months associated with tree flowering—raising concern for Brazil’s 2026/27 crop. This potential hit to future output is acting as a counterweight to more immediate supply forecasts.
Why prices recently reversed from lows
In the prior session set, the article said both Arabica and Robusta slipped to multi-month nearest-futures lows as expectations firmed for a larger Brazil crop. Data referenced in the report included USDA Foreign Agricultural Service forecasts for a record 2026/27 Brazil coffee crop of 71.9 million bags, up 14% year over year.
Additional bearish context referenced by the article included Rabobank lifting its 2026/27 global arabica surplus estimate to 9.5 million bags, from 7.0 million previously. Cecafe also reported that Brazil’s May green coffee exports rose 4.2% year over year to 2.73 million bags, a sign of strong shipment activity that can pressure futures when traders expect ample supplies.
For Robusta specifically, the article cited Vietnam export and production data that market participants may view as supportive of future availability. Vietnam’s National Statistics Office reported that Vietnam’s 2026 coffee exports (January to May) increased 7.9% year over year to 922,000 metric tons. The report also noted that Vietnam’s 2025 coffee exports rose 17.5% year over year to 1.58 million metric tons and that Vietnam’s 2025/26 coffee production is projected to rise 6% year over year to 1.76 million metric tons.
Bigger picture supply-cost factors
Some of the upward momentum was also linked to logistical and cost pressures. The article said the ongoing closure of the Strait of Hormuz has disrupted global shipping flows, tightening coffee supplies by increasing shipping rates alongside insurance, fertilizer, and fuel costs. Those higher input and transport expenses can raise landed costs for importers and roasters, supporting commodity prices even when production forecasts improve.
At the same time, the report flagged an opposing demand-supply indicator. According to the International Coffee Organization, global coffee exports for the current marketing year (October to September) fell 0.3% year over year to 138.658 million bags, a figure that can weigh on prices when traders expect softer trade volumes.
The article also referenced USDA Foreign Agricultural Service projections for the 2025/26 season, including a forecast for world coffee production to increase 2.0% year over year to a record 178.848 million bags. It said the FAS expected arabica output to decline 4.7% year over year to 95.515 million bags, while robusta production would rise 10.9% to 83.333 million bags. The report noted that ending stocks were projected to fall 5.4% to 20.148 million bags.
Market reaction and what to watch next
With Arabica and Robusta both higher, investors appear to be prioritizing near-term supply risk—especially Brazil weather effects—and inventory trends over the more optimistic longer-run production outlook. The balance will likely remain sensitive to updated forecasts for Brazil’s harvest timing and to evolving El Niño assessments that could influence next season’s flowering and yields.
Traders will also be watching upcoming USDA and International Coffee Organization updates for production, export, and stock estimates, as well as weather developments across Brazil and broader producing regions that could shift the supply outlook for 2026/27.
