September arabica coffee (KCU26) climbed +21.60 (+7.78%), while September ICE robusta coffee (RMU26) rose +159 (+4.47%), pushing both contracts to four-month peaks. The gains come as heavy rains in Brazil disrupt harvesting operations and raise questions about crop quality.
According to Somar Meteorologia, rainfall in Minas Gerais—the country’s primary coffee-growing region—reached 31.3 mm in the week ending June 28, representing 1,956% of the historical average.
Coffee prices have rallied over the past two weeks amid deteriorating field conditions in Brazil. ICE arabica inventories slipped to a 2.25-year low of 380,534 bags last Monday, while robusta stockpiles fell to a two-year nadir of 3,631 lots on May 15 before rebounding to 4,053 lots last week.
Adding pressure, concerns over El Niño have emerged as Commercial, a coffee trader, warns the weather pattern may delay critical rainfall in Brazil during September and October—when flowering occurs—potentially crimping the 2026/27 harvest. The Japan Meteorological Agency confirmed an El Niño event in mid-June, with NOAA assigning a 67% probability to a “Super El Niño”—the strongest on record.
Despite earlier expectations for a bumper Brazilian crop, recent data tells a mixed story. The USDA’s Foreign Agricultural Service forecasts a record 2026/27 Brazilian output of 71.9 million bags (+14% year-over-year), while Rabobank recently hiked its global arabica surplus forecast to 9.5 million bags. Meanwhile, Brazilian May green coffee exports rose 4.2% to 2.73 million bags.
Vietnamese robusta shipments remain a pressure point, with 2026 exports (January–May) climbing 7.9% to 922,000 metric tons. Vietnam is expected to produce 1.76 million metric tons in 2025/26, up 6% and among the highest since 2021.
The International Coffee Organization noted a slight decline in overall global exports for the October–September marketing year, falling 0.3% to 138.658 million bags.
The USDA projects 2025/26 world coffee production at 178.848 million bags (+2% y/y), with arabica output down 4.7% and robusta up 10.9%. Brazil’s production is forecast to drop 3.1% to 63 million bags, while ending stocks are seen falling 5.4% to 20.148 million bags.<|tool_call_begin|><|tool_call_begin|><|tool_call_begin|><|tool_call_begin|>
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