FX.co ★ Arabica Coffee Futures at Over 1-Month Low

Arabica coffee futures have dipped further, settling around $3.45 per pound, marking the lowest point since December 29. This decline is primarily driven by improved supply forecasts that overshadow short-term shortages. According to Reuters, weather conditions in Brazil have been more favorable compared to the previous year, with expectations for the 2026 Arabica coffee harvest to outpace that of 2025. Cepea has noted that recent heavier rainfall across nearly all of Brazil's coffee-growing regions has provided much-needed relief to Arabica producers, positively impacting bean development during this critical growth phase. Concurrently, sales for Brazil's 2026/27 coffee crop have reached roughly 8% of its production potential, falling behind last year's figure of 9% and a historical average of 17%, as reported by Safras & Mercados. This lag is attributed to futures prices remaining lower than spot prices, which discourages forward sales. Additionally, the recent devaluation of the Brazilian real has exerted further downward pressure.