On Tuesday, July arabica coffee (KCN25) closed down 2.35% at $8.10, marking a 2-1/4 month low, while July ICE robusta coffee (RMN25) fell 0.96%, down 42. Recent rainfall in Brazil has alleviated dryness concerns, impacting coffee prices. As reported by Somar Meteorologia, southern Brazil received 10.6 mm of rain during the week ending June 14, 131% of the historical average for this period.
Brazil’s coffee harvest is progressing, with Cooxupe coffee cooperative reporting that it is 13.7% complete, slightly ahead of last year’s 13.6%. The USDA predicts Brazil’s 2025/26 coffee production will rise by 0.5% year-over-year to 65 million bags, adding to the supply that has pressured coffee prices over the past six weeks. Robusta coffee prices have support from reduced inventories, which fell to a one-month low of 5,157 lots.
Weak Brazilian green coffee exports were noted, dropping 36% year-over-year to 2.8 million bags in May. Vietnam’s coffee production has also declined by 20% due to drought, forecasted at 1.472 million metric tons for the 2023/24 crop year. The USDA projects a global arabica coffee deficit of 8.5 million bags for the 2025/26 marketing year.
