On Wednesday, September arabica coffee (KCU26) fell by $13.60, or 4.01%, while September ICE robusta coffee (RMU26) dropped by $104, or 2.68%, driven by a weakening Brazilian real that prompted long liquidation in coffee futures. The Brazilian real reached a 2.5-week low against the dollar, boosting export sales from the country’s coffee producers.
Recent reports highlight that Brazil’s coffee harvest was only 58.3% complete as of July 24, lagging behind 67% at the same time last year. Additionally, heavy rainfall in Minas Gerais, Brazil’s largest coffee-growing region, saw 32.4 mm of rain, or 2700% of the historical average, potentially disrupting future harvests. The USDA anticipated a 6.0% increase in global coffee production for the 2026-27 season to a record 189.7 million bags, primarily due to enhanced growing conditions in Brazil.
Robusta coffee prices are pressured by rising inventories, which peaked at a 4.25-month high of 4,254 lots last Wednesday, reducing to 4,136 lots today. In contrast, arabica inventories fell to a 2.5-year low of 274,168 bags. Concerns surrounding the potential impact of the El Niño weather pattern could further influence coffee prices as it may hinder the coffee crop next year.
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