Coffee slips 5% from local high amid favorable weather in Brazil📉

Futures on Arabica coffee on ICE (COFFEE) drop almost 5% today amid Brazil weather change, falling from local high.

• Brazil forecasts point to more rain next week, easing dryness fears.

  • But NOAA warns of a 71% chance of La Niña (Oct–Dec) → risk of drought and damage to the 2026/27 crop.

• Brazil harvest revisions (HedgePoint):

  • Total 2025/26 crop: 64.7M bags (+0.7% YoY).

  • Arabica: cut to 37.7M bags (-13.3% YoY, down from 39.6M est.).

  • Robusta: lifted to 27M bags (+30% YoY).

• Regional contrasts:

  • Arabica heartlands (Minas Gerais, São Paulo): below-average rainfall in key stages hurt yields and quality.

  • Robusta regions (Espírito Santo, Bahia): favorable weather + grower investment → stronger-than-expected yields.

• Longer-term outlook:

  • Arabica 2026/27: still uncertain; April rains hurt current crop but improved tree health for the next cycle.

  • Robusta 2026/27: early flowering (since August) shows positive signs so far.

COFFE (D1 interval)

Source: xStation5