Daily Coffee Report 8/12/26
Daily coffee report
StoneX Coffee Team
- Coffee
Coffee Slides to Multi-Month Lows as Record Brazil Crop Weighs on Market
By: Alexis Rubinstein, Managing Editor - Coffee Network
CoffeeNetwork (New York) - Coffee futures remained under sustained pressure on June 4, extending a multi-week decline as increasingly bearish supply expectations—centered on Brazil’s expanding crop—continue to dominate market sentiment.
Arabica prices have fallen to approximately 250–255 cents per pound, hovering near their lowest levels since late 2024 and marking a sharp reversal from the elevated price environment that defined much of last year. The recent move reflects a decisive shift in the market narrative, as traders reprice the global balance from tightness toward surplus.
At the core of this transition is Brazil. The world’s largest producer is entering the 2026/27 cycle with a significantly improved production outlook, with the U.S. Department of Agriculture estimating a crop of 71.9 million bags, up 14% year-on-year, driven largely by a strong arabica recovery. This aligns with broader trade expectations that place Brazil’s output firmly in record territory, reinforcing the perception that global supply is entering a new expansion phase.
The impact is already being felt in futures markets. Prices have declined sharply over the past several weeks—down roughly 13% month-on-month and nearly 30% compared to a year ago—as managed money and speculative participants unwind positions built during the tight-supply cycle of 2024 and early 2025. While fundamentals have provided the underlying rationale, the pace of the recent selloff has also been exacerbated by fund liquidation, amplifying downside momentum as the market adjusts to the new outlook.
Yet despite the prevailing bearish tone, the path lower has not been linear. The market remains supported by a combination of low inventories and unresolved weather risks, both of which continue to limit downside conviction.
Inventory dynamics, in particular, highlight the complexity of the current environment. Certified arabica stocks held on ICE have recently hovered near multi-month lows, while robusta inventories remain tight relative to historical norms. These conditions underscore the lingering effects of several years of supply deficits, during which pipeline stocks were steadily depleted. As a result, even as production improves, the market remains vulnerable to short-term disruptions that could quickly tighten availability.
Weather continues to represent the most significant wildcard. While conditions in Brazil have recently turned more favorable for harvest progress—with drier weather allowing picking activities to accelerate following earlier delays—the market is already beginning to look ahead to the next crop cycle. The potential emergence of El Niño later in the year poses a risk to flowering during the critical September–October period, leaving open the possibility that current surplus expectations could be challenged.
Beyond Brazil, supply pressure is also being reinforced by developments in Vietnam, the world’s largest robusta producer. Export data shows shipments rising strongly, with January–April exports up nearly 16% year-on-year, supported by steady production growth. The combined effect of recovering arabica supply and expanding robusta availability is broad-based, weakening both segments of the market and reducing the likelihood of a near-term supply squeeze.
From a technical perspective, coffee futures are firmly entrenched in a downward trend. The recent break to new contract lows has confirmed negative momentum, with prices now trading below key support levels that had previously held through earlier corrections. However, the speed and scale of the decline suggest that the market may be approaching oversold territory, raising the potential for short-covering rallies in the near term.
External macro factors are adding another layer of influence. A stronger U.S. dollar continues to act as a headwind for commodities broadly, while evolving trade policies and logistics costs remain relevant to the coffee supply chain. Although tariff pressures have eased compared to the volatility seen in 2025, their residual effects are still shaping sourcing decisions, particularly in the U.S. market.
For market participants, the near-term outlook points to continued downside pressure, but with increasing vulnerability to corrective moves. The longer-term trajectory will depend not only on the realization of Brazil’s production potential, but also on the evolution of weather conditions and the pace at which global stocks can be rebuilt.
In that sense, while the coffee market may be moving out of its recent period of scarcity, it is not yet entering a phase of stability. Instead, it is navigating the early stages of a new cycle—one defined by greater supply, but still shaped by uncertainty.
Alexis Rubinstein
- Coffee
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Daily Coffee Report 8/11/26
Daily coffee report
StoneX Coffee Team
- Coffee
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