Cup of coffee with coffee beans in burlap sack on coffee tree background by Amenic181 via Shutterstock
September arabica coffee (KCU26) is down -4.90 (-1.46%) today, and September ICE robusta coffee (RMU26) is down -1 (-0.03%).
Coffee prices gave up an early advance today and turned lower on signs of drier weather in Brazil. Below-normal rainfall in Brazil should allow for the pace of the country’s coffee harvest to speed up, a bearish factor for prices. Somar Meteorologia reported today that 5.8 mm of rain, or 92% of the historical average, fell in the week ended August 9 in Brazil’s Minas Gerais, the country’s main arabica-coffee growing region.
Rising inventories are weighing on robusta coffee as ICE robusta inventories climbed to a 4.5-month high of 4,285 lots today. By contrast, a bullish factor for arabica coffee prices was that ICE arabica coffee inventories fell to a 2.5-year low of 244,172 bags last Friday.
Arabica has support due to the slow pace of Brazil’s coffee harvest. The harvest among members of Cooxupe co-op was 67.3% complete as of July 31, behind the year-earlier pace of 74.2%. On July 17, Safras & Mercado reported that Brazil’s 2026/27 coffee harvest was 64% complete as of July 15, behind last year’s comparable level of 77% and the five-year average of 70%.
The latest USDA biannual forecast was bearish for coffee prices. On July 22, the USDA forecast that global coffee output in the 2026-27 season will rise by +6.0% (10.8 million bags) to a record 189.7 million bags, mainly due to improved growing conditions in Brazil. The USDA expects global arabica production to rise +12% y/y, although robusta production is expected to fall by -0.7% y/y. World ending stocks are expected to rise +1.9 million bags to 26.3 million bags. On June 3, the USDA’s Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up +14% y/y.
Concerns that an El Niño weather pattern could hurt Brazil’s coffee crop next year are bullish for prices. Coffee trader Commercial said the El Niño weather pattern may delay rains in Brazil this September and October, when tree flowering normally occurs, hurting Brazil’s 2026/27 coffee crop. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. This sets the stage for months of possible floods, droughts, and temperature fluctuations later this year that could hinder coffee production in Asia and South America.
Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices. On August 2, Vietnam’s National Statistics Office reported that Vietnam’s 2026 coffee exports (Jan-Jul) rose by +21.1% y/y to 1.31 MMT. Vietnam’s 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
