Market Report

21 Oct 2026

This week, coffee futures basis the most active December contract, rallied 25.1 cents from Monday to Monday to end at $3.15 US dollars per pound. I wrote last week that I expected prices to trade in a range of $2.90-$3.00 as the market waits for additional news regarding the arrival of Brazilian coffee in Europe. Instead, no significant grades came to the exchange last week, which the market took as a bullish signal. Momentum triggers were able to extend the rally further once the $3 per pound barrier was broken on Friday. This weekend marks the Brazilian election, with right-wing Flavio Bolsonaro facing a 75% chance of victory according to betting markets. Brazilian farmers see this as a signal for the coming improvement in Brazilian economic conditions, starting with the USD-Real exchange rate. With around 50% of their current crop left to sell, farmers have a lot of chips left on the table and it is interesting to see how they intend to play it out. On one hand, a stronger Real makes coffee sold in USD effectively less valuable at the same NY price, which should stimulate holding back coffee supply. On the other hand, a stronger economic outlook combined with an in-country interest rate of 13.75% can make turning coffee into Reais in the bank far more attractive than before, even considering the fact that farmers will have to pay taxes at year-end on coffee sold (but not coffee kept). All of these features change the potential impact farmers can bring to the market by selling coffee into rallies. As we know, a 10 million bag surplus of Arabica coffee as expected for the year equates to 35,274 lots of additional futures hedges brought into the market as soon as this coffee is sold. The timing of this becomes increasingly important to understand, beyond even the dynamics of certification for the ICE exchange. Therefore, my expectation is that the new buying will run out of steam and the coffee market will top out at $3.20 before heading to $3.05 by the end of the week.

14 Oct 2026

This week, coffee futures basis the most active December contract, fell 13.85 cents per pound to finish Monday at $2.906. Last week, I wrote that I see the market edging higher to test $3.10/lb this week before waiting for confirmation from either new pending gradings or better-than-expected September exports from Brazil. That is broadly what happened, with the market rallying to a high of $3.08 on Wednesday before collapsing to a low of $2.83 yesterday. The main action has been centered around Brazil, but not necessarily the exports as expected. Overall, Brazilian Arabica exports underperformed slightly, coming in just below 3 million bags shipped for September. However, the main storyline has been centered on the surprising first election result showing Flavio Bolsonaro ahead of incumbent left-wing Lula. Historically, no Brazilian president won the final election when losing the first round, so the surprising news of a rightward shift in Brazil reinvigorated farmers and sent the Brazilian real sharply stronger. A better outlook on the Brazilian economy under the new administration (from the farmers' point of view) will increase holding behavior, as more than half of the 26/27 crop is still in hand. The real move from 5.2 Reais per USD to 4.95 is an equivalent move, from the farmer's perspective, as coffee futures go from $2.90 to $3.04. The view is that the Brazilian Real can strengthen further if Flavio is finally confirmed as the winner in the next Brazilian election in the runoff on October 25th, although current odds already show an 80% chance favoring Bolsonaro. This week, I expect prices to trade in a range of $2.90-$3.00 as the market waits for additional news regarding the arrival of Brazilian coffee in Europe. 

7 Oct 2026

Over the last 2 weeks, coffee prices basis the most active December contract rose 20 cents from Tuesday, September 22nd to a price of 292.55 US cents per pound as of the close on Monday, October 5th. I wrote two weeks ago that I had expected prices to edge lower to the bottom of the 270-280 range. Instead, the end of September saw a market rally, breaking out of the 280 range by month end. Some short covering occurred and short-term momentum indicators resulted in net speculative buying on the week. However, these features were not the main driver, as the rally seems to be driven by tempered expectations regarding the arrival of ICE-certified stocks to be sent to the exchange for grading. As soon as pending gradings slowed down, the market began to rally. Concerns over whether there is "enough coffee" coming to be certified for the December contract are now simmering through the market, and it was the main topic of discussion at the SCTA forum in Montreux, Switzerland, this year. As we stand today, the amount of new coffee to be graded remains just above 12k bags. Brazilian exports are being watched carefully, with the new official figures for September likely to come out Friday after the market closes. Besides the outright volume of coffee going into Europe, discussions focused on whether this coffee is needed to refill pipelines for roasters nearby or in anticipation of EUDR taking effect at the end of December. Our view is that the possibility of rerouting shipments for roaster needs afloat remains low. Nevertheless, there is a difference between the possibility of coffee refilling the exchange stock pipeline and the reality of it actually happening and the market is simply waiting to be assured of that reality. In this regard, I see the market edging higher to test $3.10/lb this week before waiting for confirmation from either new pending gradings or better-than-expected September exports from Brazil.

23 Sep 2026

This week, coffee futures prices basis the most active December contract, continued to fall 7.5 cents from Monday to Monday to end at 276.4 US cents per pound. I wrote last week that I expected a broader-based commodity rally to help lift the coffee market back up to a range of 285 to 295. Instead, the commodity rally seemed short-lived as increasing expectations for inflation led the US Fed to increase interest rates, thereby strengthening the US dollar. A stronger US dollar means better value for farmers who sell coffee in US dollar-denominated amounts and receive local currency. On the geopolitical front, tensions between the US and Iran seemed to cool off this week, sparking a selloff in the energy complex which also spilled over to some downward action in coffee.  

Speculative investment in coffee futures has turned net short for the second time this year. Last time, the transition to the short side was brief in two weeks, when the market traded around $2.50. A sustained net short investment for longer than 2 weeks has not happened in coffee since October 2023, when prices were trading at $1.50 per lb. From the origin side, it is clear that there is still plenty of coffee left to sell and hedge in Brazil, despite producers remaining patient and waiting for rallies to price.  Weather continues to remain optimal for the flowering 27/28 Brazil crop, calming expectations of an El Niño-driven disaster. Overall, my expectations are for prices to edge lower to the bottom of the 270-280 trading range by the end of this week.

16 Sep 2026

This week, coffee futures prices basis the most active December contract, remained relatively stable, falling 0.8 US cents per pound over the week to end at 290.5 USC/lb. I wrote last week that I expected the market to come down to $2.80 by the week's end as positive weather in Brazil changes sentiment. The market fell to a low of 282 on Thursday before finding more significant support. It seems that most of the support for coffee last week came from outside markets, as renewed inflation fears and fears of escalation in the US conflict with Iran sent commodities prices higher. Overall, Crude Oil led the rally, heading above $100 a barrel. Coffee, which saw price action mostly to the downside, may have been an attractive contract to buy for investors looking for a well-priced "inflation hedge".

Specific to the coffee events, the main headlines continue to be bearish. Most importantly, August shipments from Brazil were reported to be a seasonal record for both Arabica and Robusta. For Arabica, the only time shipments came close to last month's level was the record crop of 20/21. This highlights that coffee availability is spilling out from an overflowing Brazil to the rest of the world, where inventories desperately need to be refilled. As a result, I would expect the week's price action in coffee to be more macro-dependent, likely landing in a range of 285 to 295 US cents per lb.

9 Sep 2026

This week, coffee futures basis the most active December contract fell 18.15 US cents per lb from Tuesday to Tuesday, to end at $2.91 per pound. Last week, I wrote that I expected the market to find some support around $3 due to news of persistently hot weather in Honduras and Guatemala, and establish a range of $3.00-$3.10. It seems that this support level was broken rapidly, and the market continued its descent. The major topic in terms of coffee news this week has been widespread rainfall throughout Brazil. September is now on track to become one of the wettest starts on record, with plenty of soil moisture at the moment to support the trees for the 27/28 crop. As a result, Brazil is seeing a sizable and widespread flowering throughout all of the production regions.

Lower temperatures and continued forecasts for rain mean that there is no risk of potential losses from adverse weather during flowering at the moment. Our team sees the 26/27 harvest at 97% finished in Arabica as of the end of last week, so the impact of new flowerings on remaining harvesting activities is expected to be minimal. This is due to the fact that the remaining cherries left to harvest are sweepings of cherries that fell to the ground and are likely to be of poorer quality anyway, regardless of additional rainfall. The surprising turn in positive weather dynamics in Brazil despite a general market concern regarding a "Godzilla El Niño" is likely to continue to weigh on prices this week. Therefore, my expectation is for the market to come down to $2.80 per pound by week's end.

2 Sep 2026

This week, coffee futures basis the most active December contract fell 9.8 cents from Monday to Monday to end at 311.50 US cents per pound. I wrote last week that I expected futures to correct to a 320 to 310 range by the end of the week as Brazilian crop commercialization weighs in on the market. This is exactly what happened, as higher prices over the last two weeks combined with the winding down of harvest brought differentials in Brazil to attractive levels for exporters. Additional exporter buying means additional futures hedging, which brings pressure on the market. From a nearby availability perspective, it seems that Brazil export flows are starting to improve as well, lightening the outlook on near-term coffee supply in Europe. This should be good news for coffee buyers at destination. However, one factor to keep in mind is that our outlook for Central American availability for the coming 26/27 crop has decreased slightly due to persistently hot and dry weather in Honduras and Guatemala. As a result, I would expect the market to find some support around $3 per pound for the week and establishing a new $3-$3.10 range.

26 Aug 2026

This week, coffee futures basis the most active December contract rallied 23.75 cents from Monday to Monday to finish at $3.4165 US dollars per pound. The main driver behind the price action was a Monday rally of 5.72%, sending prices from 322.65 on Friday's close to a high of 342.55, not seen since July 9^th record 11.6% rally. Last week, I wrote that I expected the nearby tightness from the front month spread to stop making an impact on the December futures contract and that futures will start heading lower, ending the week perhaps below $3.10 USD/lb. This clearly did not materialize as the low of the week was 315.

The main drivers behind the persistent upward price action are due to renewed fears that the situation that occurred ahead of September contract first notice day will also materialize for December. While everyone in the market generally agrees that Arabica coffee is in surplus this season, concerns regarding overall levels of ICE certified stocks remain. At 226,242 bags as of writing, certified stocks are within striking distance of the lows set on November 2023, which, if broken, would put them at the lowest level since 1999. While not worrisome in itself, the pending EUDR legislation beginning in Jan 2027 will create an additional administrative burden to certify new exchange stocks from Brazil in Europe. For those willing to rebuild certified inventories against the December contract and before EUDR is enforced, only a few months remain to buy and ship this coffee.

Given the rally we've seen and the fact that harvesting of the 26/27 crop is nearing completion, is it undoubtable that coffee has been bought at or below levels where it would be economically feasible to tender it to the exchange as ICE certs. However, the volume traded and its destination creates far more ambiguity. Whether this coffee is actually bound for the exchange, or will instead go to fulfill previous commitments to roasters, remains the main argument in the view that ICE certified stocks may not actually be rebuilt in time for December futures expiry. However, despite this caution, I maintain the view that coffee is indeed flowing out of Brazil in greater volumes and that the overall surplus generated by 26/27's crop is more than enough to fulfill global Arabica demand at current price levels. More importantly, even if a coffee lot is not certifiable for ICE exchange, farmers can still sell futures to hedge this coffee, thereby adding pressure to the market through crop commercialization. Therefore, my view is repeating last week with an expectation for futures to correct down to a 310-320 range.  

19 Aug 2026

This week, coffee futures prices rose 4 cents from Monday to Monday to end at $3.179 US dollars per pound basis the most active December contract. I wrote two weeks ago that I expected the market to rally to 325 by week's end (2 weeks ago), which did broadly occur but took an extra week from what I predicted. The main storyline has been the juxtaposition of nearby tightness, as expressed by the September-December spread, and a near-record Brazil Arabica crop that is extremely undersold seasonally.

For the former, the spread continues to trade higher, currently at 31 cents premium for the nearby contract. This shows that nearby stock availability continues to be very low, especially when it comes to cheap ICE certified Arabica stocks that have now fallen below 250 thousand bags. Unless these stocks are replenished with incoming Brazilian coffees, spreads are likely to continue to behave in a similar pattern as the nearby spread of September-December.

For the latter, Brazilian Arabica crop is estimated to be 90% complete, which is almost entirely caught up to seasonal averages. The remaining coffees to be harvested are actually cherries that have fallen to the ground and are of marginal quality. Overall, Brazilian farmers still have a lot of coffee to sell and the current export pace suggests that just the bare minimum is being booked to cover nearby roaster needs. Should farmers choose to fix this coffee by selling futures, the negative pressure from these sales will continue to impact the market, especially by suppressing attempts at market rallies.

Overall, I expect the nearby tightness from the front-month spread to stop making an impact on the December futures contract. With that in mind, my expectation for this week is that futures will start heading lower, ending the week perhaps below $3.10 USD/lb. 

5 Aug 2026

This week, coffee futures basis the most active December contract, fell 8.5 cents from Tuesday to Tuesday to end at $3.088 US dollars per lb. I wrote that I thought the path for prices would continue higher this week as we approach the index roll from the September to December contract, with the market looking to break out of $3.50 by the end of the week. Instead, the roll period was relatively uneventful as the spread between September and December actually weakened to 15 cents a pound, highlighting a general lack of concern regarding ICE-certified stocks, which now sit just above 250k bags. With the index roll period passed, liquidity in the September contract is likely to reduce significantly, and roasters should really consider fixing their outstanding September positions by the end of this week, if not done so already. As reported before, it seems unlikely that new crop Brazilian Arabicas will arrive in any significant volume to alleviate the current drawdown in ICE certified inventories, which is caused by a mispricing between ICE exchange coffee and Honduras and Peru replacements (the former being at least 30 cents cheaper).

From Brazil, our team has completed their quality analysis of coffees arriving from the farm and has reported slightly disappointing news. Both cup quality and overall screen sizes fell a big short of expectations for such a large crop, leading us to reduce both Arabica and Conilon crops for the 26/27 season. This isn't a major concern, as Brazil will still produce a record crop overall. However, top-quality coffees, which our team has found disappointing this season, are precisely the ones that are needed to refill ICE-certified stocks. Additionally, farmers seem to have held onto a large amount of inventories from last season, which also contributes to overall coffee availability. Once again, though, high old crop carryout simply brings a plethora of aging and stale cups to the market, not profiles consistent with coffees deliverable to the exchange or highly sought after by roasters as Central American replacements. Therefore, I expect that the market will rally, with December futures heading up to 325 by the week's end.  

29 July 2026

This week, coffee futures prices basis the most active September contract, rallied 17.3 cents from Tuesday to Tuesday to end at 339.4 US cents per pound. I wrote last week that I expected us to continue to trade in an illiquid 320-345 range this week, and this is mostly what happened, though the market did touch down to below 310 at some point last Friday. The ICE exchange reduced initial margin requirements last week to 15k and then 10k, easing some financial pressure from the market.

However, Monday and Tuesday's price action saw renewed interest in the coffee market and specifically the spread between the September and December contract. With ICE certified stocks drawing down quickly and going below a major psychological threshold of 300k bags, it is becoming clear that not enough new crop Brazil Arabicas will come to the exchange to replace dwindling inventories. Farmers in Brazil are well capitalized and have just seen the market rally 75 cents their way into the peak of harvest. Therefore, they are in no hurry to sell aggressively unless we get to new highs. Other origins such as Colombia are still fulfilling short commitments to exporters, or are sitting in between crops and therefore out of the market. This leaves Brazil as the only game in town (besides Robusta), which makes the September contract particularly vulnerable to the upside. My assessment is that the path will continue higher this week as we approach the index roll from the September to December contract, with the market looking to break out of 350 towards 360 by the end of the week.

22 July 2026

This week, coffee futures prices basis the most active September contract fell 5.45 cents per pound to end at 324.55. I wrote last week that I expected us to test $3.50 highs again last week and this occurred on Tuesday. Another rally early in the morning through a low-liquidity environment brought us to a high of 352.40 before the market completely reversed and erased its daily gains, settling actually down 3.9 cents on the day. Following the failure of another attempt higher on Wednesday (this time up to a high of 336), the market took a tumble on Thursday, falling 14 cents to a low of 312 before finding support again.

The main issue in the market remains an overall lack of participation or liquidity. This allows large price moves to occur with smaller buy orders, favoring well-capitalized hedge funds exploiting high-frequency algorithms in order to make intra-day gains. A major issue cited by most commercial market participants has been the increase by the ICE Exchange of initial margin requirements from $5,500 per lot at the beginning of July to $21,200 following the historic rally of 50 cents a pound. It has now been 2 weeks with the market establishing a consistent 310 to 350 range, and both historical and implied volatilities have come off significantly. However, the ICE exchange has not reduced the initial margin requirements, nor are they willing to share their reasoning for keeping margin requirements this high for this long. The higher margin requirements preclude smaller market participants from trading, and reduce selling pressure from producers who simply cannot afford this type of margin outlay on their cash flow. For anyone trading, I would reach out to your clearinghouse in order to get some explanation or consultation from ICE regarding this situation. Meanwhile, I would expect us to continue to trade in an illiquid 320-345 range this week. 

15 July 2026

This week, coffee futures basis the most active September contract fell 19.9 cents from Monday's historic rally to finish at $3.30 US dollars per pound. I wrote last week that I expected us to test the highs around $3.50 again this week and likely settle around $3.15 if the Monday highs hold. This is indeed what happened as the market pulled back strongly on Tuesday, setting a low of $3.15. Then, another attempt to rally occurred on Thursday after the ICE exchange increased initial margin requirements, placing additional financial stress on an already extremely volatile market. However, Thursday's rally failed to breach the $3.50 level, and so we settled into a broader range around $3.30. 

The most important factors for understanding what could happen next to the market concern Brazil farmer selling behavior. With peak harvest approaching for the 26/27 crop, farmers received a major gift in terms of much higher prices in order to commercialize their near record Arabica crop. Differentials for Brazilian coffees have fallen, and it will be critical to see if any of these differentials will result in coffee heading to the exchange as certified stocks. A rebuild of certified inventory will be a major calming factor to this market which sees destination stocks as precariously low. However, it is important to note that ICE certified stocks are essentially a "buyer of last resort" and that cheap coffees could easily find a home with a roaster first looking for better prices. Until the nearby needs of roasters are sorted out, the market is vulnerable to higher price shocks, forcing weak shorts out and sending prices higher. Therefore, I would expect us to try once again to test the $3.50 highs this week. 

8 July 2026

This week, coffee futures basis the most active September contract rallied an incredible 72.15 cents from Monday to Monday, ending at 349.95 US cents per pound. Prices moved more than 72 cents in a year of price movement, only 4 other times in the last 30 years, underscoring how intense the volatility experienced last week was. Most of the move was dominated by Monday's rally, which saw the first 48.75-cent gain in coffee's history and the first up 15% up print in a single day. Using the 250-day standard deviation of returns, yesterday's rally was a 6.75 sigma event. The only days coming close to the price action seen Monday came around the 1994 black frost that decimated the entire Brazilian producing state of Parana, forever changing Brazil's coffee landscape.

What caused such a momentous rally? My best explanation so far is the overwhelming of sell-side liquidity by immense money flows coming from other markets. With the Strait of Hormuz storyline subdued, oil futures prices have collapsed, leading many macroeconomic funds to look for other places to allocate their long positions. Coffee, cocoa, and Orange juice, which had previously seen massive gains in 2024, coinciding with the last El Niño, seemed like obvious targets to buy into now that El Niño has again been officially announced. All three markets saw massive money flows over the last week, and especially on Monday. Coffee broke out of most technical barriers as early as last Wednesday when the futures market cleared $3. Any investors on the speculative side looking for lower prices were now hesitant to sell above these levels. The only remaining seller in the market was Origin, which indeed actively participated and reduced basis prices steadily as the week progressed.

However, increasing margin requirements and a sharp rally put severe financial constraints on even well-capitalized coffee merchants. Medium-sized Brazilian cooperatives facing a near record crop around peak harvest are highly vulnerable to sharp upside price shocks as they would have to pay an increasing margin on their coffee hedges. As a result, I believe some of them had to reduce their hedge into the market rally, further exacerbating Monday's price rise.

I wrote last week that my expectations were for the market to edge higher to 280 US cents/lb. While directionally correct, the magnitude of the rally caught me completely off guard. This week, I would expect Origin to step in to sell more coffee in size if futures prices begin to stabilize. However, I am not certain that the reallocation of capital to the soft complex has yet been done. Therefore, I would expect us to test the highs around $3.50 again this week, and likely settle around $3.15 if the Monday highs hold.

1 July 2026

This week, coffee futures basis the most active September contract rose 10.8 cents from Monday to Monday to end at $2.778 USD per pound. Then, Tuesday's price move completely blew the week's price action out of the water. The last trading day in June (and Quarter end and fiscal year end for many companies) saw prices rally a whopping 18.65 cents (6.5%). This is the largest single day price move in percentage terms since July 9th, 2024 and the largest in cents/lb since September 15th, 2025. Last week, I wrote that I expected prices to continue heading higher up to 270 by week's end and that largely tracked. So what caused such a dramatic breakout of our recent price range on Tuesday? 

Prices across the general commodity complex rose together on Tuesday as new investment flows were coming in. Quarterly index rebalancing favors commodities that have performed negatively over the course of the year, and coffee is no exception, having fallen from $3.48 at the end of 2025. A key technical level of 280 was quickly breached, which was an area of previous resistance twice in our rangebound market since May. From there, momentum traders took over issuing orders to get out of their short positions and put on new longs due to the technical signal breach. Story chasing started coming into the market as well, as news of colder weather circulated (we dont believe there is any of concern at the moment in Brazil), as well as damages to crop quality in Brazil from the recent rains (we agree there is some but that was well known last week). In the end, pressure on newly issued speculative short positions entered when the market was below 280 were forced to liquidate on the day, and what had been a rangebound market for a few months turned into a major breakout. Where do we head from here?

Broadly speaking, nothing material has changed over the last several weeks in terms of fundamental drivers for the market. If anything, weather risks throughout Brazil's winter so far been mild. However, some notable storylines have been brewing for quite some time. The most important of these is the persistently high differentials in Colombia. Colombian differentials historically tend to be a bit of a "canary in the coal mine" in terms of predicting flat price action. Differentials for baseline commercial qualities trading above +60 despite peak Mitaca flow have been concerning traders for some time. The reasoning for a bullish view on the market is simple. Differentials are showing that futures have been suppressed too low for too long, and only a rally can return them to a normalized trading range. This next week will be critical to watch whether or not strong physical sales start to materialize at cheaper differentials. If so, I believe that a breakout of $3 per lb will not hold for long and we will return to a new range of $2.80 to $3.00. However, if origin pressure does not come, coffee futures could continue to rally.    

24 Jun 2026

This week, coffee futures basis the most active September contract rose 7.8 cents from Monday to Monday to end at $2.67 USD per pound. Last week, I wrote that I expected "coffee futures to continue heading higher as pressure comes on newly deployed short position, up to a high of 270 by week's end. " This is almost exactly what happened, as overextended shorts were forced to liquidate. On the physical side of the market, coffee prices have continued to stay stubbornly high. The banner bearer for these stubbornly high prices is Colombia, where differentials for even the most basic exportable qualities have risen above +60 US cents per pound. This is despite the country seeing its Mitaca (Southern crop) peaking. The dislocation between physical prices for high-quality washed Arabicas and the futures market suggests that futures may have gone down too fast, forcing farmers to hold back and getting desperate buyers to pay up. The only way this dislocation can be solved is through a large coffee oversupply. For specific origins like Colombia, this is difficult to achieve as only a few origins can offer a similar, premium cup profile. These continued challenges, combined with a low and dwindling ICE Certified inventory, keep speculative longs engaged in the futures market. Therefore, my expectations this week are for the market to continue to edge higher towards 280 USC/lb.  

17 Jun 2026

This week, coffee futures basis the most active September contract rose 17.55 cents from Monday to Monday to end at $2.592 USD/lb. I wrote last week that I expected the market to rally back to the 255-265 range, and this is exactly what happened. I noted last week that any delay or issue from the timeliness of harvest and quality could exacerbate price shocks higher, as we are in a very tight stock situation due to the fact that any excess coffee stock for the 25/26 crop has been retained at origin. Beginning on Thursday, a weather front brought rain to the main Brazil coffee areas, halting harvesting activities. Overall, we saw 27 mm of rain fall across Brazil on an average basis over a 4-day period. The effect of the delay is not significant in the scheme of the overall harvest for a close to record arabica crop. However, harvesting activities have already been slightly delayed seasonally, and any further delay puts less selling pressure on the market. Furthermore, there is some concern about coffee quality deteriorating as a result of the rains. Since cherries are dried naturally on large patios in Brazil, rainfall introduces excessive moisture and possible fermentation/phenol defects to drying coffee. We also don't believe that the impact on quality is very significant on the scale of the total harvest, but limiting the availability of the most premium coffees (which are currently the most expensive) is an additional factor to concern the market. Overall, I expect coffee futures to continue heading higher as pressure comes on newly deployed short positions, up to a high of 270 by week's end. 

10 Jun 2026

This week, coffee futures basis the most active July contract continued to fall 13.3 cents per pound to $245.9 US cents/lb. Open interest is switching from the most active July contract to September as Index funds and other more passive investors roll their positions forward. I wrote last week that I expected the market to stabilize in a new 255-265 range, but it continued to decline. New sellers emerged from the speculative community, with Non-Commercial Gross Shorts growing to 31,769 lots. This is the highest short investment for speculators since October 23rd, 2023, when futures prices were trading at 167 USC/lb. It seems that speculative interest is trying to time their entry ahead of farmers, who (as a general category) still sit about 14,000 lots below average levels and about 60,000 lots lower than the last time we saw this large a crop about to be harvested in Brazil. While this is a huge figure, it's important to note that historically it is quite rare for farmers to add significant coverage in a falling market. Instead, by trying to anticipate the flows, it's possible that spec shorts are putting themselves in a vulnerable spot at just the right time when we are in the tightest moment for Arabica from a stock perspective. Any delay or issue in Brazil from the timeliness of harvest or quality can exacerbate price shocks further. Therefore, my view is that the market will rally next week back to a 255-265 range.  

3 Jun 2026

This week, coffee futures prices basis the most active July contract fell 13.7 cents to a $2.60 USD per pound. This is the lowest futures level since November 11th, 2024. My view last week was that we were likely to continue this week in a 265-275 cent range, despite the market looking like it was going to break out of that range early in the week. This analysis was proven correct until Monday, when the coffee complex took another wave lower, sliding down to an almost 2-year low. Harvesting in Brazil is accelerating and differentials for Brazilian Arabicas are steadily dropping as the harvest accelerates. On the export front, Brazil continues to showcase its lost market share in favor of Washed Arabicas from Central America and Natural Arabicas from Ethiopia, all supplemented by increased usage of Robusta. Indeed, Robusta exports for the first 5 months of 2026 are 28.8 million bags, 4 million bags higher than the same period in 2025. Normally, this would indicate that Robusta stocks have increased at destination, but we see stocks actually drawing on a net basis this year. This means that so far, the usage of Robusta is rising rapidly. This pattern is clear worldwide, and makes sense given the persistently high arbitrage (difference) between Arabica and Robusta prices. Using a combination of Robusta and a higher quality Arabica is one of the oldest "tricks in the book" to substitute for Brazil Naturals, and this blend shift is being adopted on a large scale. The effect is a ballooning inventory in Brazil with an increasingly disinterested buyer for high-priced Naturals. In the next several months, Brazilian farmers will be forced to lower prices to bring some of these buyers back, or be forced to hold out a near record crop in a falling market. It's not this week, though. For now, they still have time. My view on this week is that the market will stabilize in a new range of 255-265 USc/lb.

27 May 2026

This week, coffee futures prices basis the most active July contract rose 8 cents to finish at 272.35 US cents per pound. I wrote last week, and I expected a small bounce to $2.70 before prices keep heading lower below $2.60 by the week's end. Instead, the market seemed to find good support at $2.70 once it got there on Tuesday. The reason behind the sustained support seems to come from strong roaster buying. Commercial Gross long position, the CIT report's best analog for roaster coverage, increased by 6,910 lots this week to 63,537 lots. This is the best level of seasonal roaster coverage since 2022, highlighting the comfort level of roasters fixing futures here. The decision to fix now rather than wait comes from an uncertain outlook over the upcoming July/September contract roll, as well as the season heading into the Brazilian winter. With physical coffee prices still elevated and ICE-certified stocks still low, any news of cold could result in a disproportionate price spike. However, the opposite could also occur if weather risks in Brazil remain benign and the roaster finds themselves overbought relative to their actual demand figures. Therefore, my view is that we are likely to continue this week in a 265-275 cent range.

20 May 2026

This week, coffee futures prices basis the most active July contract collapsed 18.1 cents per pound to $2.64 USD/lb at the close of Monday's trading. I wrote last week that I expected prices to test the range again of $2.75 to $2.70. Indeed, the market trended steadily lower throughout the week, coming into the $2.75 range by Thursday. On Friday, a generally negative day across the commodity complex brought coffee futures within striking distance of the $2.70 resistance level. Once broken, long stops were triggered, sending prices to a low of 265 very quickly. It seems that selling pressure from origin continues to overwhelm the market, while roasters seem to be much better covered this year. The main storyline this week is news of worsening coffee demand in the United States. Net imports + changes in US inventory levels are down 1.9% on a 12-month rolling basis ending in March. This continues to underpin a stretched consumer dynamic where inflationary pressures are starting to impact overall demand for the country's favorite beverage. From a futures perspective, lower demand means roasters would have to adjust their buying target, reducing nearby inventories to help preserve cash flow. If futures prices continue to head lower, potential savings from promotions can increase demand again, creating a more volatile cycle of inventory accumulation and futures buying. Nevertheless, negative demand headlines could not come at a worse time for coffee bulls heading into a record crop harvest in Brazil. This week, I would expect a small bounce to $2.70 before futures prices head below $2.60 by the week's end. 

13 May 2026

Last week, coffee prices basis the most active July contract fell 3.2 cents from Monday to Monday to 282.3 US cents per pound. I wrote last week that my expectation was that headline El Niño-chasing would push more investment into coffee this week, pushing futures up to $3.00 per pound. It seems that buying came to the coffee market, lifting prices higher last Tuesday and this past Monday. From a reporting perspective, speculators indeed added to their net long position by 1,645 lots or 9.9% on the week. The overall Soft commodities complex saw $2.9 billion of net inflows and grains saw $8.7 billion of inflows last week, no doubt underpinned by El Niño announcements circulating. However, price action did not support a breakout of the range. Instead, coffee futures tested the bottom of the recent trading range, falling to a low of 271 before finding support in the form of reductions in ICE-certified inventories. The futures price action underpins the general understanding that Brazilian selling pressure is massively behind and will likely cap rallies as the 26/27 harvest picks up. This week, I expect prices to test the bottom of the range again at 270-275 US cents/lb.

6 May 2026

Over the last 2 weeks, coffee futures prices basis the most active July contract continued to oscillate within a tight range of $2.80 - $3.00 per pound, ending the 2-week period lower by 2.25 US cents. I wrote 2 weeks ago that "I would expect the market to try to test $2.75/lb this week and break down 10 cents lower if that level is breached, or continue in the same weekly range of $2.80-$2.95 if it holds." It seems that the support level at $2.80 has held strong as the market tested this level twice in the 2-week period and has bounced off of it. The main highlights seem to be renewed interest from speculators in agricultural commodities due to the higher cost of fertilizer as a result of the Iran war, and news of the upcoming El Niño. With regard to higher fertilizer prices, indeed, farmers are seeing higher prices for fertilization. However, with coffee futures continuing to trade in the 95th percentile of historical price levels, our research team believes that all farmers in the world can profitably grow coffee. Therefore, increasing prices will simply reduce farmer profit margins slightly. With higher incomes earned from the past two crop seasons, farmers are also in a better financial situation to deal with the shock of higher prices, so we are unlikely to see major reductions in fertilizer use at the moment. With regard to El Niño, the rapid acceleration of El Niño's phase is indeed concerning, as we had initially believed the El Niño onset to start in late Q2. An intense El Niño like the one experienced in 2024 negatively affects production expectations for Central America and Vietnam, while positively affecting prospects in Colombia and Indonesia. For Brazil, 2024's El Niño brought hotter temperatures, which also bears watching this year. Overall, El Niño's impacts are likely to be felt to some extent in the 27/28 and 28/29 crop outlooks. As far as the incoming 26/27 crops starting to be harvested now, there is no impact. My expectations are that headline El Niño chasing will push more investment into coffee this week, pushing futures up to $3.00 per pound before finding origin selling. 

22 April 2026

This week, coffee futures prices basis the most active July contract fell 8.5 cents to finish at $287.80 US cents/lb. I wrote last week that I expected the market to trade in a narrower $2.90 to $3.05 range as resolution of the conflict with Iran determined the price action. Indeed, it seems that the conflict with Iran seems to be (maybe, kinda, sorta nearby) resolved, so the market had tested below the defined range after moving up to a high of $3 on Tuesday. Therefore, my market prediction of a relatively quiet period leading up to May first notice day proved correct. I believe the main reason why the market has stayed quiet during this period (the same one that has seen an immense amount of volatility in 2025) is that roaster coverage is at much better levels now than a year ago. Last year, roasters were forced to fix futures prices at higher and higher levels as they ran out of time approaching contract expiry. This year, the market has been steady to lower, allowing roasters plenty of opportunities to fix their nearby futures contracts on selloffs. This week, as we transition into the May contract delivery period, it will be interesting to see whether nearby demand for ICE-certified inventories continues. If it does, it could mean that nearby inventory levels at the destination will continue to stay tight until the Brazilian crop 26/27 starts flowing. However, it is possible that more coffee will come to the exchange for May, offsetting the nearby certified demand. In all, I would expect the market to try to test $2.75/lb this week and break down 10 cents lower if that level is breached, or continue in the same weekly range of $2.80-$2.95 if it holds.  

15 April 2026

This week, coffee futures saw the most active contract shift from May to July as we approach the first notice day. If you have any outstanding May positions, please fix them! Futures prices basis the July contract rose 3.85 cents from Monday to Monday to $2.9635 USD per pound. I estimated that the market would attempt to test resistance at $2.75 last week, and it reached a low of $2.79 on Tuesday before rallying further. The main highlight of the week was the declaration of a ceasefire between the US and Iran, resulting in widespread support for commodity prices. It now appears that the risk of a protracted conflict is slowly being mitigated, with the main focus for coffee shifting to the front-month spread (May-July) as we head into the delivery period. A stable or weakening spread will be negative for prices, whereas a rally in the spread will be supportive. Overall, I expect the market to trade in a narrower $2.90 to $3.05 range on the week. 

8 April 2026

This past week, coffee futures basis the most active May contract fell 12.35 cents from Tuesday to Tuesday to end at 286 US cents per pound. Most of this price action took place today at the time of writing. I expected last week for the market to reestablish a range of $2.90 to $3.00/lb for the week and this is what broadly occurred as geopolitically based speculative inflows balanced against increased selling interest from origin. Today's price action is a bit dramatic and began with a general risk-off environment following the US President's escalatory and inflammatory notes regarding the ongoing conflict with Iran. A more prolonged war can result in a broader commodity sell-off due to inflationary pressures caused by higher energy prices, ultimately impacting consumer spending. From the initial wave down, we broke below a critical 290 USc/lb support level, which indicates more selling from momentum funds nearby. As we look toward next week, most of the risk hinges on the Iran conflict, with further escalation being negative for prices. In other commodity news, Cocoa prices, which have been recently compared to coffee, have fallen to 136 US cents/lb, showing how brutal Bear cycles can become once supply concerns ease. My estimate for this week is for the market to try to test resistance at $2.75/lb.

1 April 2026

Last week, coffee futures basis the most active May contract fell 14.45 cents from Monday to Monday to finish at 292.55 US cents per pound. Last week, I wrote that I expected prices to rise to $3.20/lb before finding some support from origin sellers. This is what broadly happened as futures prices climbed to a high of 319 on Tuesday and Wednesday, before collapsing quickly and, frankly, beyond my expectations. The CFTC CIT report, which publishes the weekly holdings of futures contracts by category (commercial vs. speculator vs. index), showed that speculators were buyers of coffee, along with several other agricultural commodities, during the week, which coincided with heavy commercial selling, presumably by origin. Indeed, the Gross Commercial short category that typically represents origin hedging in the report is at 100,673 lots as of last Tuesday. This is well behind their average value of 119,000 lots and well below their level of coverage one year ago (125k lots) and in 2024 (148k lots). Knowing that a bumper crop is coming from Brazil beginning in late May, hedging pressure will be an increasingly important measure to consider for the market. What is important to note is that hedge pressure often coincides with the commercialization of coffee in domestic markets as it is prepared for export. In other words, price fixations occur when farmers choose to sell. This typically happens during periods of market rallies, like we saw last week. The initial stimulus for the rally came from an influx of buying that likely came from geopolitical asset flows. This catalyst may not always be around to support prices. For this week, I anticipate the market to reestablish a range between $2.90 and $3.00/lb.

25 March 2026

Last week, coffee futures prices basis the most active May contract rose 14.15 cents from Monday to Monday to close at $3.07 US dollars/lb. I wrote last week that I expected the market to break above $3/lb by the end of last week and this indeed occurred with a breakout on Thursday. Geopolitical drivers around the war with Iran have been a major driver for Oil price increases, which in turn lifts broader commodity prices. One relationship is that oil prices are tied to fertilizer, which is a major input for agricultural commodities. For coffee, the impact of fertilizer price increases is doubly muted. First, coffee is a tree crop, so a reduction in fertilizer is unlikely to have a major impact on yields until the following production season. Second, nearly all origins are currently producing coffee profitably, with some (especially in East Africa) continuing to see record ROI on coffee growing. An increase in fertilizer price, while reducing profitability, is unlikely to impact its actual usage so long as growers still make money on selling coffee. Nevertheless, a major emerging theme in the coffee market is that Brazil continues to hold back coffee at a time when stocks at destination are extremely tight. Even though the new crop in Brazil is maturing well, it will be some time before the tight supply is resolved and until then, coffee futures can continue to be supported. This week, I expect prices to go up to $3.20/lb before finding some support from origin selling.

18 March 2026

This week, coffee futures basis the most active May contract fell 4.05 cents from Monday to Monday to end at 292.85 US cents/lb. I wrote last week that I expected prices to continue rallying, finding resistance between $3.10 and $3.15 per pound. Instead, coffee futures seemed to have stalled out at a high of 297.45 on Thursday before crashing down and continuing lower on Friday. Overall bearish sentiment prevailed as the general consensus at the National Coffee Association conference in Tampa, USA, last week was that Brazil is coming with a close to or at record crop. With a surplus of coffee available, many expressed a willingness to sell to the market, or at least wait to buy until the new crop harvest begins. However, current differentials (or premiums over NY futures prices) for Brazilian Arabica coffees remain alarming. Furthermore, the US and Israeli war with Iran seems to show no signs of pausing or de-escalation. This reduces the nearby coffee supply by challenging trade lanes in the Straight of Hormuz and the Red Sea. Overall, I continue to see market conditions supportive of a break above $3 by the week's end.

11 March 2026

This week, coffee futures prices basis the most active May contract rallied 12.3 cents from Monday to Monday to finish at $2.969 USD per pound. Last week, I indecisively wrote that "a steady flow of roaster buying of fresh coffee at higher differentials can mean that we have found a nearby bottom, and the market rallies back to $3/lb". This is broadly what happened, as fresh speculator interest in coffee futures seemed to appear following the escalation of US and Israeli strikes on Iran. Oil futures are the obvious contract to see renewed interest, but coffee also has some effects stemming from the possible closure of Red Sea routes and the strait of Hormuz. Ethiopian and Ugandan coffees have provided important substitutes for Brazilian natural Arabicas which are currently sitting in the strong hands of farmers. While the current availability of current crop offers is low, exports are expected to pick up March onward from the region. An additional delay to transit from those ports will put more pressure on roaster needs to come from Brazil. This is playing well into Brazilian farmer strategies, who have been waiting for a rally in prices in order to sell their last holding of 25/26 crop. This week, I expect prices to continue to rally, finding resistance between $3.10 and $3.15 a lb. 

4 March 2026

Last week, coffee futures basis the most active May contract fell 2.35 cents from Tuesday to Tuesday to end at $2.83 US dollars per pound. I wrote last week that I expected the market to stay where it currently is, as there are two competing arguments for either direction. On one hand, differentials for most coffee origins have risen to seasonally elevated levels as roasters are clearly holding back coffee as futures fell below $3/lb. On the other hand, continued certified stocks flow into be graded against the March contract, showcasing that the nearby supply situation has improved tremendously for Arabicas since Q4 2025. Additional volatility has come into our market following the joint US and Israeli strikes on Iran. While the current logistical impact of military escalation affects the East Africa to Europe trade routes, additional passive money flows can come into the commodity complex as a spillover effect from energy. However, the view could also be that metals and energy are likely to rally as a result of escalating conflict, while softer commodities such as cocoa and coffee should see less demand. For this week, muted signals continue, but I believe that we are likely to end the week higher, with futures testing 290 USc/lb.

25 February 2026

Over the last 2 weeks, coffee prices basis the most active May contract fell 3.6 cents over the last two weeks ending on Friday, February 20th at 285 US cents per pound. The most important news of the week was the final ruling on US President Trump's use of IEEPA on instituting widespread tariffs, which at one point included green coffee. While coffee has since been exempt, the Supreme Court ruled overwhelmingly against the Trump administration, citing that only Congress has the power to impose taxes and tariffs. For the US roaster, this ruling means that tariffs paid on coffee last year may be refunded by the US Treasury. We are currently awaiting further guidance on the potential timeline and process. 

For the larger coffee market, the impacts of the ruling are largely muted as coffee has already been exempt from tariffs since late 2025. Instead, futures prices seem to be stuck in a bit of no-man's land as the market is struggling to digest both the surge of nearby availability of cheap Honduran and Nicaraguan coffee sent to be added to the vastly depleted ICE Certified inventories, with the fact that differentials for both Brazilian and Colombian origins have climbed to historically elevated levels in the past 2 weeks. The ultimate deciding driver in my mind for market direction will come from nearby roaster demand. If the roaster is well covered, we could see ourselves breaking the 275 threshold by the time March rolls around on the calendar. However, a steady flow of roaster buying of fresh coffee at higher differentials can mean that we have found a nearby bottom, and the market rallies back to $3/lb. As is typical when I see both sides as valid arguments, my view on the week is that we will continue to trade where we currently are.

11 February 2026

This week, coffee prices basis the most active May contract continued to fall, ending 24.05 US cents per lb lower from Monday to Monday to end at $2.9385 USD/lb. Futures prices broke below $3 for the first time since early August as a triple combination of coffee arriving to be graded for the exchange, a generally negative macroeconomic tone, and better-than-expected weather in January out of Brazil continued to erode confidence that prices need to continue to stay high. I anticipated the market heading towards $3 before stabilizing, and this has broadly occurred, although the price action surprised a little bit more to the downside than expected. Overall, speculators have removed nearly $2.7 billion USD of long investments in coffee futures, which is the largest liquidation for the whole calendar year of 2026 out of the agricultural and soft commodity complex, with the exception of Soybeans (which is a 2.5 times larger overall market). Typically, a liquidation event of this magnitude is followed by a small rally or price stabilization, so I would expect the market to stick around $3 until next week, making this a good week to secure supply for the spring season.

4 February 2026

This week, coffee prices basis the most active March contract collapsed a whopping 50.1 cents from Tuesday to Tuesday to end at 317.1 US cents per lb. Last week, I wrote that "I see continued technical momentum buying to take the market back up to 365-370 by Friday before finding sizeable origin selling". Boy was I wrong... Overall, it seems that roaster fixations, which I thought were going to keep the market buoyed into the index roll period, were largely completed for the March contract. Roasters have finally been able to reduce their exposure before the Index roll, eliminating the vicious cycle of getting caught having to fix before first notice day. On top of that, general negative macroeconomic performance resulted in most commodities falling during the week. Lastly, the long-anticipated coffees coming to refill the pipeline of the exchange have finally begun to show up. These three factors rising in tandem resulted in the floor collapsing on a market that had long been teetering on the edge between trying to price in a tight nearby supply and an ample forward supply. This week, the damage to the chart has been done and long speculators cannot remain in position. Therefore, I anticipate the market heading lower to $3 before stabilizing at the end of the week. 

28 January 2026

This week, coffee futures basis the most active March contract rose 0.95 US cents per lb to 356.25. Last week, I wrote that I expected the market to be testing a critical support level around 340, which, if broken, can send prices down to 325, and if held, can move prices back up to 350. This is broadly what occurred last week. On Wednesday of last week, a large amount of roaster fixations helped to keep the market above the 340 threshold. It seems that roasters were happy to add futures below 350, especially in the March contract, where the inversion (difference between March and May) is particularly steep. Knowing that past historical periods saw strong rallies in the front-month futures contract following the passive index roll period (likely to occur in 2 weeks), roasters are extra cautious to ensure that they are not caught again in a vicious upward cycle. Indeed, as roasters have to fix their exposure by first notice day, time is becoming limited to fix those March futures. Liquidity is likely to erode once the passive Index has rolled its position, and it is likely that we will see consecutive up days in the March contract heading into the first notice day. Therefore, my suggestion to roasters this week is to finalize fixing your March futures by the end of this week. As for the market action, I see continued technical momentum buying to take the market back up to 365-370 by Friday before finding sizeable origin selling.

21 January 2026

This week, coffee futures basis the most active March contract fell 13.75 US cents per lb to 346.5 US cents per pound as of Tuesday. I wrote last week that I expected the market to go down to 350 cents/lb before finding more significant roaster support. This is broadly what happened. The index rebalancing period is now complete, with Index buying a net of 1.050 lots, a virtual nonevent. Overall, negative macroeconomic forces are converging on the coffee market at the same time as Central American origins find themselves at the peak of harvest and without significant demand. As a result, coffee differentials, or premiums (or discounts) to the futures price for some origins like Honduras, have dropped drastically. This indicates an increasing possibility of more coffee arriving to be graded as exchange stocks. Recovery of exchange stocks is critical because it will showcase to non-physical coffee participants that Arabica coffee is, in fact, in a surplus and doesn't warrant the current extreme backwardation that is priced into the market. Once backwardation eases, origin will find it easier to sell coffee farther in the future, promoting more market liquidity overall. Meanwhile, however, the market will be testing a critical support level around 340 this week that, if broken, can send futures to 325 and back up to 350 if the support level holds. 

14 January 2026

This week, coffee futures basis the most active contract fell 3.3 US cents per pound from Monday to Monday to 356.05 basis the most active March contract. I wrote last week that I expected the upward-trending market to continue, perhaps finding origin selling between $3.70 and $3.75 per lb. This is broadly what happened on Tuesday and Wednesday when the market touched a high of 383 on the week, before sharply reversing course. Thursday saw a sharp reversal with the market collapsing 14.7 cents on the day. Several large shifts occurred in the market. Most importantly, indications from Honduras came that exporters have had trouble finding buyers for coffee that is approaching the peak of harvesting for the 25/26 season. With the financial constraints additionally imposed on exporters in the form of higher coffee prices, high interest rates, and an extremely punishing spread (price difference between March and May futures), many are left with no choice but to sell it to buyers of last resort. These buyers are trade houses that have the knowledge to deliver certified coffee to the ICE exchange. Certifying coffee to the ICE exchange sends two very important signals to the market. First, it signals an increase in nearby available, highly transparent supply. Second, it showcases that perhaps there is a surplus of Arabica globally, or at least that the current market conditions prohibit some coffees from being used immediately. Ultimately, the devil is in the details as to how much coffee will come and when, but this shift is important to note by itself. This week, I expect coffee futures prices to start heading lower once Index rebalancing is concluded, ending the week closer to 350 than 360. 

7 January 2026

Happy New Year to all! This week, this year’s coffee futures prices have started on the ascent, rallying 7.2 cents from Monday to Monday to start the first real trading week of the year at $3.59 per pound. The main drivers behind the rally are investors coming back into coffee after a lackluster holiday season. Overall, the updated COT showed speculators reduced their positions by 52% since mid-November (15k lots). Additionally, my calculations indicate that the annual index rebalancing period for coffee will result in around 4000 lots of additional buying. I wrote 2 weeks ago that perhaps the 340 support would get tested, which it did around Christmastime. However, since then, the market has firmly bounced back into the 350's, which prevents large momentum signals from hitting the sell button further. In all, I would expect this week for the upward trending market to continue, perhaps finding origin selling between $3.70 and $3.75 per lb.

24 December 2025

This week, coffee futures prices basis the most active March contract fell 4.75 cents per pound from Monday to Monday to finish at 347.35. Last week, I wrote that I expected the market to go down to 350 cents/lb before finding more significant roaster support. It seems that this support level was broken as momentum and technical failures took prices down to a low of 339 before the market could find a nearby floor. Roaster buying had indeed been heavy, but as is typical during the second half of December, overall trading volumes have been thin. This week, the expectation is that the negative nearby technical picture continues to take the market slowly lower as longs take profit on the year and try to avoid any last-minute losses. Therefore, my expectation is for the market to continue to oscillate in the 340 to 355 range on the week, finishing perhaps at an attempt to break below the 340 support.

17 December 2025

This week, coffee futures prices basis the most active March contract fell 8.45 cents from Monday to Monday to finish at 360.3 US cents per pound. I wrote last week that I expected the bullish structure of the market to support the 370-390 range for the week. Instead, it appears that continued pressure from the origin to price newly harvested coffee inventories has emerged ahead of overall market concerns regarding nearby supply tightness. The market now faces two major technical support points at the 100d and 200d moving averages that, if broken, will initiate additional selling from momentum traders. On top of this, our team has concluded their crop tour in Brazil and has increased their production outlook for the 26/27 crop. Overall, we see production at 49.7m bags Arabica and 25.9m bags Robusta for the 26/27 season, with both Cerrado and Rondonia expected to produce record amounts of coffee. Weather conditions continue to be nearly ideal for all regions. It is important to note that the pressure from this crop will likely only come in Q2 of 2026, but it can be significant in altering perceptions of the future supply of coffee. This week, I expect the market to go down to 350 cents/lb before finding more significant roaster support.

10 December 2025

This week, coffee futures prices basis the most active March contract fell 7.25 cents from Monday to Monday to end at 366.2 US cents per pound. I wrote last week that I expected prices to continue to trade in a 370-390 range, and the expectation was largely correct before Monday tested the lower limits of the range. The market continues to be pitted against a nearby tightness situation showcased by the extreme inversion in nearby contracts and depleting certified inventories. However, on the latter point, it seems that we have turned the corner with more gradings showing up each day. While stock continues to be low in certified inventory, the almost official postponement of the EU deforestation regulation will make it much easier to bring coffee to the exchange in Europe in 2026. These factors, combined with what seems to be sluggish demand from the roaster so far for Q1, make for resetting the range lower at 360-380 for this week. 

3 December 2025

This week, coffee futures prices basis the most active March contract rose 3.15 cents from Monday to Monday to end at 379.7 US cents/lb. I wrote last week that the market would trade in a 370-390 range again, as technical support signals around 370 are firmly held. Over the past week, the market has seen a significant reduction in volumes and volatility. On one hand, hedge pressure from producers (largely Central America, which is entering peak harvest) creates negative pressure on the market. However, on the other hand, roaster buying seems to emerge on any significant downward price action to keep the market propped up. Indeed, the buying interest from US roasters, especially, has been notable as they already are receiving a 40 cent or so "discount" from just a few weeks ago due to the tariff alleviation. The nearby spread of December March trading at +31 in its delivery window serves as a staunch reminder for roasters to fix their nearby March positions before the situation escalates. Indeed, participants remain fixated on the availability of nearby Arabica ICE certified inventories. Until significant replenishments are made to these inventories, spreads will remain at elevated levels, keeping the overall bullish structure of the market intact. Therefore, I expect the same for this week, with prices trading in the 370-390 range.  

26 November 2025

This week, the coffee futures basis the most active March contract fell 0.05 cents from Monday to Monday, ending at 376.55 US cents/lb. Last week, I expected the market to trade in a 370-390 range as the December contract went into delivery. Overall, 4 participants are taking delivery of December coffee futures at a record level of inversion this century (+31 at the time of writing). This means that traders are willing to pay a roughly $21 million premium to take coffee in the nearby contract, in-store US and Europe vs. buying coffee and shipping it to the destination against the March contract. This places a significant bullish undertone to the market that has largely negated the most important announcement so far in Q4, which was the alleviation of US tariffs on Brazilian coffee. The announcement of the 40% tariff being lifted came on Thursday and saw the market sell off 24 cents to $3.51 in the early trading hours on Friday. However, a large wave of roaster buying kept the market buoyant enough for the spread action to mount a massive reversal on the day. The market did enough to keep the technical chart patterns intact. Therefore, my expectations this week remain unchanged, with a 370-390 range expected again.

19 November 2025

This week, coffee futures basis the most active March contract fell 16.55 cents from Monday to Monday to end at $376.6 US cents/lb. Last week, I wrote that with the US Supreme Court looking unfavorably upon tariffs implemented under IEEPA, the Trump administration must now pivot its stance on "making deals" with other countries, making it less likely to give concessions to specific countries like Brazil to then have all tariffs become overturned by the Supreme Court. On Tuesday, the market reacted greatly to news of a forthcoming relief on coffee tariffs. News of relief on coffee were mentioned by President Trump in a nightly news interview on Monday and followed up mid-day by the US Treasury Secretary, citing possible exemptions soon to come for all commodities that cannot be grown in the United States. The result was a market selloff of 22.85 cents per lb, or 5.8% on the day. On Friday, the White House’s executive order put words on paper. All tariffs for coffee have been removed, with the exception of Brazil (40%). While that is a huge step in the right direction, the most important and punishing tariff for US roasters remains in effect. The US administration specifically held out on giving what it sees as a concession to Brazil in reducing the coffee tariff. Leaving the tariff open for negotiation suggests negotiations are valued and ongoing, but the overall impact on coffee from the reduction in all other tariffs is muted without Brazil in the mix. Therefore, my expectation is for the market to continue to trade sideways 370 - 390 this week as the December contract goes into the delivery period.  

12 November 2025

This week, coffee futures basis the most active March contract rose 6.45 cents from Monday to Monday to end at 393.15 US cents/lb. I had written last week that I expected the market to trend upward during this OI roll period, with a natural target for March futures of $4/lb. Indeed, that is what happened, as March futures tested highs of 398 and 396 on Wednesday and Thursday before selling off. The main headlines around coffee this week are the overall negative sentiment coming from the US Supreme Court as it reviews the legality of Trump's use of the International Emergency Economic Powers Act (IEEPA) for issuing tariffs. Three conservative justices on the nine-judge panel appeared skeptical during the hearing, leading most market participants to believe that most tariffs would be reversed by the court's ruling. The upside for coffee is that all tariffs would disappear overnight from the ruling and that likely the government will have to pay back all of the collected tariffs as well. However, the downside here is that the Trump administration must now pivot its stance on "making deals" with other countries, making it less likely to give concessions to specific countries like Brazil, to then have all tariffs become overturned by the Supreme Court. Therefore, the market is now stuck waiting until the Supreme Court makes a decision on IEEPA, which, given the prioritized nature of the case, should be sometime this year... This week, I project the market will continue to be impacted by the tightness in the December/March spread, with options expiry on Wednesday a key day to watch. Therefore, I see March continuing to trade in a 390-400 cent range for the week.

5 November 2025

This week, coffee futures basis now the most active March contract rose 17.75 US cents per pound to $387.7 cents/lb from Monday to Monday. I had written last week that I expected prices to collapse to around $3.50 a pound before finding support from the index roll period. Instead, prices only fell on Tuesday to a low of $359.2 before stabilizing throughout the week. I believe that strong roaster fixation for outstanding contracts in December was a large contributor to prices avoiding a more significant selloff. The week's end saw a new decline in ICE certified inventories, while the Index roll seemed to bring new focus on the record high inversion (difference between December and March contract). It's also important to note that there has been absolutely no movement on the part of the US administration regarding the alleviation of tariffs for coffee. Therefore, it is possible that any speculators who wanted to sell ahead of the deal "being done with Brazil" have become disappointed by Monday and were forced to buy back. This week, the tone of the market shifts fully toward the Index roll and the amount of coverage roasters still have in December futures. Over the past 18 months, the need for roasters to fix has far outpaced the need of origin to sell during this period of time (between Index roll and options expiry), which has been fully taken advantage of by speculative buy interest. While I do believe the situation for the roaster in terms of fixation is not as dire as in the past, the direction of the market is clearly upward during this OI roll period. Therefore, the natural target for March futures is $4/lb by the end of this week.

29 October 2025

This week, the coffee futures basis the most active December contract fell 14.5 cents from Monday to Monday, ending at 391.55 US cents per pound. I wrote last week that the price action depended largely on tariff announcements from the US Trump administration, with additional tariffs on Colombia leading to a breakout to new highs, and signs of relief resulting in a fallback below $4. The latter occurred, with US President Trump specifically mentioning the need to lower coffee prices following his meeting with Brazilian President Lula in Malaysia on Sunday. Most parties believe that relief on the tariff side will be forthcoming, removing a major undercurrent of near-term tightness in the market. On the production side, nearly ideal conditions have been observed in Brazil this week, adding additional calm to the 26/27 crop potential. We have also raised our outlook on nearby Vietnamese and Indonesian Robusta crops at a time when Robusta usage tends to peak seasonally. The continued price difference between Arabica being almost twice the price of Robusta is starting to weigh in on roaster choices in blends that have the capability to switch. As a result, nearby pressure on Robusta is increasing at the expense of Arabica. This week, I expect prices to collapse to around $3.50 a pound before finding support from the index roll period.

22 October 2025

This week, coffee futures basis the still most active December contract rose 13.9 cents from Tuesday to Tuesday, closing at 413.55 US cents per pound. My expectations were for the market to correct to 370 cents on the week as beneficial rainfall puts any worries regarding the upcoming Brazilian Arabica crop into the rear-view mirror. While we got the rains we expected, the main focus of the market was on the nearby availability of coffee. Certified stocks continued to draw on the week, showcasing again that coffee continues to be sold on the spot to satisfy nearby demand, primarily in the United States. On the government side, the current escalation between Colombia and the United States poses additional risks of tariff escalations with Colombia. The risks of punitive tariffs on the 2nd  largest US supplier of coffee (after Brazil) at a time when roasters are facing near record high prices will be absolutely detrimental to the US roaster. The near-term effect will be the need to find replacements on the already tight spot market, likely exacerbating the December-March spread currently trading at +23 cents. If the US were to announce an additional punitive tariff on Colombia and not exempt coffee from this tariff, the market would likely break the previous highs of 425 US cents/lb. However, if the tariff announcement can be delayed or coincide with potential negotiations on eliminating the punitive tariff on Brazil, the market will likely calm down to below $4.

14 October 2025

This week, coffee futures basis the most active December contract fell 17.7 US cents per pound to end at 373.60. Last week, I wrote that I expected the market to calm down and move toward 375 by Friday. This is exactly what happened. Increasing amounts of decertification of ICE certified inventories are having less and less impact on the market as it is well understood that at least the Mexican inventory portion of certified stocks (131k bags out of 509k total) will likely be sold by the end of this year. Certified stocks had reached a low of 224k bags as of December 2023, when the market was trading at 179 cents per pound, less than half of today's price. During the last several months there have been ample opportunities to buy at or below tenderable parity in Brazil. Furthermore, the possible delay or postponement of EUDR legislation would remove a significant impediment to certifying new inventories in Europe. I would argue it is more important to focus on future Arabica production to see if another deficit year can be prevented, resulting in a stabilization of the coffee market. As far as weather is concerned, rains fell across the main growing areas in Brazil late last week, as per the expectations of our weather strategist Greg Oddo (link to last weather update here). The main producing areas of Brazil saw 30+ mm of rainfall on a production weighted basis beginning last Wednesday. With another 35mm+ looking to come over the next 7 days, these rains will result in the fixations of the main flowering for the 26/27 Brazilian Arabica crop. General consensus is that the next crop will likely not be a record for Arabica, but will come close and beat the last 2 crop estimates by at least 5 million bags and will certainly put concerns over 131k bags of ICE certified inventories in the rear-view mirror. My expectation for this week is that the market will attempt to test 370 cents/lb this week and if broken will finish around 360.

7 October 2025

This week, coffee futures prices basis the most active December contract continued to rise 12.7 cents from Friday to Friday to end at 390.75 US cents/lb. I expected the market to continue to trade in a 360-390 USc/lb range this week, and we ended the week at the top of that range. The main drivers to the upside continued to be weather in Brazil and the decertification pace of ICE certified stocks. Regarding the former, our team believes we are in normal weather conditions but the market has gotten nervous on the nearby period of heat and dryness. We see rains appearing by middle of this week after several days of dry and hot weather, which helped to stimulate the main flowering event in Brazil. Per coffee agronomy textbooks, 3-5 days of dryness following a flowering is ideal as it allows cross pollination and drying out of the flower buds that then fixate to cherries so long as follow up rains come. Regarding the latter, ICE certified stocks indeed are drawing at a rapid pace and increase whenever prices fall on the futures market. Some trade houses have been seen explaining the need to decertify inventories in order to help support US roasters facing high tariffs. Certified stocks do have commercial value, especially in the US, but it is imperative to point out that using certified inventories has a significant outsized impact on prices and spreads. Overall, I expect the market to calm down this week and move toward 375 by Friday.