Coffee futures rose on Wednesday, extending a rebound for both major Arabica and Robusta contracts. December Arabica coffee settled higher, closing up 1.25 cents (0.43%), while November ICE Robusta coffee finished up 35 dollars per metric ton (1.03%), after trading near recent highs. The move followed fresh weather-related concerns tied to Brazil’s next crop cycle and the risk that dry conditions could affect the flowering stage for the 2026/27 harvest.
Key takeaways
- Price move: December Arabica coffee closed up 1.25 cents (0.43%) and November Robusta rose 35 dollars (1.03%).
- Catalyst: Dryness concerns in Brazil and El Niño-driven uncertainty around September–October rainfall boosted the market.
- Implication for traders: A weather-driven risk premium is building, even as supply outlooks remain pressured by expectations of abundant global production.
- Inventory signal: Arabica inventories recently fell to a multi-decade low before rebounding, while Robusta inventories rose to a multi-month high.
What drove the move
Coffee prices climbed as traders refocused on Brazil’s crop risk during a critical phase for the 2026/27 season. The flowering stage, which helps determine yields later in the year, is sensitive to rainfall patterns. According to meteorologist Climatempo, rain chances were limited for Brazil’s Minas Gerais region over the next week—Minas Gerais being the country’s largest Arabica-producing area.
Additional support came from El Niño concerns. According to a report cited from the U.S. Climate Prediction Center on July 8, the El Niño developing across the equatorial Pacific is expected to be among the strongest in more than 75 years. The commercial market commentary referenced by the report said the pattern could delay rains in Brazil during September and October, the period when flowering normally occurs. That combination—forecasted rainfall disruption risk and the timing of flowering—was a key driver of the bullish repricing.
Market reaction and where the balance is shifting
The rally still needs to be reconciled with broader supply expectations that have weighed on the complex over the past month. According to the International Coffee Organization (ICO), global coffee production for 2025/26 rose 4.4% year over year to a record 183.6 million bags, while consumption fell 0.9% to 180.6 million bags. The result was a surplus of around 3 million bags, the first surplus in five years, which has been cited as a reason coffee prices were pushed lower recently.
Even so, Wednesday’s gains suggest traders are willing to pay for weather uncertainty as Brazil approaches its next growth window. Brazil’s crop outlook also remains a moving target. Last week, Conab—Brazil’s crop forecasting agency—raised its 2026 coffee production estimate to 67.6 million bags from 66.7 million bags previously. The report said Brazil’s 2026 Arabica production is expected to rise to 48.21 million bags (up 34.8% year over year), while Robusta production is expected to fall to 19.39 million bags (down 6.6%).
At the same time, the market also faced countervailing bearish signals. The report pointed to beneficial rainfall in Brazil and favorable moisture conditions in Vietnam. Somar Meteorologia said 29.7 mm of rain—about 112% of the historical average—fell in the week ended September 27 in Minas Gerais. In Vietnam, Vaisala said abundant rains have improved soil moisture levels and should support cherry development in the Central Highlands, Vietnam’s largest coffee-growing region.
Inventories and export flows
Inventory trends have been another key ingredient behind price direction, with different implications for Arabica versus Robusta. The report said ICE Arabica coffee inventories fell to a 27-year low of 217,646 bags on September 15, though they rebounded to an eight-week high of 260,054 bags by Wednesday. By contrast, ICE Robusta inventories climbed to a 10-month high of 5,398 lots last Thursday, a factor that has generally been interpreted as limiting upside in Robusta despite weather-related risks.
Export data also points to ongoing supply flow. According to figures cited from Cecafe on September 10, Brazil’s total August coffee exports rose 31% year over year to 4.155 million bags, a record for the month of August. Arabica exports increased 26% to 2.87 million bags, while Robusta exports rose 54% to 953,592 bags. Separately, the report said Brazil’s Trade Ministry reported August coffee exports increased 44.6% year over year to 206,618 metric tons, the most in eight months.
Further pressure for Robusta came from evidence of larger Vietnam exports. The report cited Vietnam’s National Statistics Office, saying 2026 coffee exports for January through August rose 13.7% year over year to 1.33 million metric tons. It also referenced Vietnam’s 2025 exports increasing 17.5% year over year to 1.58 million metric tons, with 2025/26 production projected to climb 6% year over year to 1.76 million metric tons (29.4 million bags).
What analysts are focusing on next
While short-term weather risk is supporting prices, forward-looking production forecasts remain a constraint. The report cited the latest USDA biannual forecast as bearish for coffee. According to that USDA projection referenced, global output in the 2026–27 season is expected to rise 6.0% (10.8 million bags) to a record 189.7 million bags, mainly due to improved growing conditions in Brazil. The USDA also expected global Arabica production to increase 12% year over year, even as Robusta production is expected to fall 0.7%. Ending stocks were projected to rise 1.9 million bags to 26.3 million bags. A separate USDA forecast cited in the report on June 3 projected a record Brazil crop of 71.9 million bags for 2026/27, up 14% year over year.
With Arabica and Robusta inventory signals diverging and supply forecasts still pointing to ample availability, traders are likely to monitor weather developments in Brazil—particularly rainfall trends during September and October—alongside incoming inventory updates. The next pricing catalysts will likely include further meteorological updates, additional revisions from forecasting agencies, and upcoming data on exports and stocks as the market reassesses the balance between near-term crop risk and longer-term supply.
