Coffee futures extended last week’s rally on Monday, with July Arabica finishing higher and posting its strongest close in two weeks, while July ICE Robusta also rose to a five-week high. The gains were driven by fresh weather-related supply concerns for Brazil alongside inventory trends that remain supportive for both varieties.
Key takeaways
- Arabica: July ICE Arabica coffee rose 5.75 cents, or 2.24%, closing at a two-week high.
- Robusta: July ICE Robusta coffee added 13 dollars per metric ton, or 0.360%, finishing at a five-week high.
- Catalyst: Traders pointed to forecasts for moderate to heavy rainfall in Brazil’s coffee regions, which could disrupt harvest timing, plus declining ICE inventories.
- Implication: The market is balancing near-term supply uncertainty against expectations for larger production in Brazil and rising exports from Vietnam.
What drove the move
Weather risk in Brazil remained the central theme supporting prices. According to forecaster Vaisala, moderate to heavy rainfall is expected this week across Brazil’s coffee-growing regions, raising concerns that persistent rain could delay the harvest. That concern comes at a time when the market is already sensitive to developments tied to El Niño.
Further weather uncertainty is tied to a possible shift in seasonal patterns. The U.S. National Oceanic and Atmospheric Administration (NOAA) estimates a 67% probability of a “Super El Niño” this year, potentially among the strongest on record. The Japan Meteorological Agency confirmed an El Niño pattern has formed across the equatorial Pacific, which could translate into swings in rainfall and temperatures later this year—an outlook that traders said could complicate coffee production in Asia and South America.
Supply-side data also supported the rally. According to ICE inventory figures cited in the report, ICE Arabica inventories fell to a 6.75-month low at 398,940 bags last Friday. ICE Robusta inventories slid to a two-year low of 3,631 lots on May 15 and were listed at 3,857 lots on Monday, still near subdued levels.
Balancing forces: production and export outlooks
Despite Monday’s strength, the market’s risk profile is mixed. Earlier in the month, Arabica and Robusta slid toward multi-month lows amid expectations for a larger Brazilian crop. The report referenced the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS), which forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up 14% year over year. Rabobank also raised its estimate for the global arabica surplus in 2026/27 to 9.5 million bags from 7.0 million bags.
In addition, export data suggested stronger outbound shipments from Brazil. The report cited Cecafe saying Brazil’s May green coffee exports increased 4.2% year over year to 2.73 million bags.
For Robusta specifically, Vietnam—a key producer—continued to pose a potential overhang. The report cited Vietnam’s National Statistics Office showing 2026 coffee exports (January to May) rose 7.9% year over year to 922,000 metric tons, and that 2025 exports jumped 17.5% year over year to 1.58 million metric tons. It also referenced projections for production to climb further in 2025/26 to a four-year high.
Shipping disruption and broader market signals
Another factor cited as bullish for coffee prices was disruption to shipping routes. The report said the ongoing closure of the Strait of Hormuz has disrupted global coffee supplies, tightening availability by raising costs across shipping rates as well as insurance, fertilizer and fuel for importers and roasters.
Not all data pointed toward tighter global balances, however. The report also referenced a note from the International Coffee Organization (ICO) indicating global coffee exports for the current marketing year (Oct–Sep) fell 0.3% year over year to 138.658 million bags.
Looking ahead, the report cited a USDA FAS bi-annual update that projected world coffee production for 2025/26 to rise 2.0% year over year to a record 178.848 million bags, with arabica output down and robusta output up. It also referenced expectations for declines in ending stocks.
What to watch next
With prices responding to both near-term weather risks and longer-horizon production forecasts, traders will likely monitor updated rainfall and seasonal forecasts for Brazil, as well as further signals on inventory levels at ICE. Investors may also focus on subsequent USDA and ICO updates, plus any new information on shipments from Vietnam and broader shipping conditions that can affect costs for coffee buyers.
