There is a belief, in the coffee market that a strong real encourages maintaining stocks in Brazil and selling at a later date or on the domestic market. Conversely, a weak real leads to an increased desire for exports due to the opportunity to acquire strong foreign currency and limits sales in the local market.
At this moment, we are witnessing a total anomaly in the coffee market (although it works differently in the sugar and soy markets). The very weak Brazilian real (strong dollar and recent cuts by the Brazilian central bank) does not weaken the coffee market. Furthermore, demand for Brazilian coffee is increasing due to production constraints in other regions of the world, primarily due to the limitation of Robusta production. Interestingly, it is expected that the current Arabica season will be strong, yet prices continue to rise sharply, and speculators' positions are at an all-time bullish high.
Coffee prices are currently 10% below the local peaks from 2022, and today there was a closing of the gap created after the contract rollover. Prices are approximately 30% lower compared to the records from 2011.

Source: xStation5
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