July arabica coffee (KCN25) Monday closed down -5.75 (-1.64%), and July ICE robusta coffee (RMN25) closed down -77 (-1.74%).
July arabica coffee prices on Monday gave up an early advance and fell sharply on news of beneficial rainfall in Brazil. Somar Meteorologia reported on Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received 10.6 mm of rain during the week ended June 14, 131% of the historical average for this time of year.
Coffee prices on Monday initially moved higher due to the strength of the Brazilian real. The real (^USDBRL) on Monday rose to an 8-1/4 month high against the dollar, discouraging export selling from Brazil's coffee producers.
Coffee prices remain generally weak due to Brazil's ongoing coffee harvest, with arabica posting a 2-week low last Friday and robusta falling to a 10-month low. Brazil's Cooxupe coffee co-op announced last Tuesday that its members reported the coffee harvest was 13.7% complete, compared with 13.6% at the same time last year. Cooxupe is Brazil's largest coffee cooperative and Brazil's largest exporter of coffee.
Meanwhile, Safras & Mercado reported last Friday that Brazil's 2025/26 coffee harvest was 35% complete as of June 11, slightly behind last year's comparable level of 37% but in line with the 5-year average of 35%. The breakdown showed that 49% of the robusta harvest and 26% of the arabica harvest were complete as of June 11. Brazil's arabica harvest has been slowed by heavy rain in some areas.
Robusta coffee has support after ICE-monitored robusta coffee inventories fell to a 1-month low last Friday of 5,177 lots.
Coffee prices have been under pressure over the past six weeks due to concerns about higher coffee production and ample supplies. On May 19, the USDA's Foreign Agricultural Service (FAS) forecast that Brazil's 2025/26 coffee production will increase by 0.5% year-over-year (y/y) to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to 31 million bags. Brazil is the world's largest producer of arabica coffee, and Vietnam is the world's largest producer of robusta coffee.
In a bearish factor, ICE-monitored arabica coffee inventories rose to a 4-1/2 month high of 892,468 bags on May 27 and were modestly below that high at 852,849 bags as of last Friday.
Smaller coffee exports from Brazil are bullish for prices. Last Wednesday, Cecafe reported that Brazil's May green coffee exports fell -36% y/y to 2.8 million bags.
Robusta coffee has support from reduced robusta production. Due to drought, Vietnam's coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years. Also, Vietnam's General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT. Last Tuesday, Vietnam's National Statistics Office reported that Vietnam's 2025 Vietnam's Jan-May coffee exports are down -1.8% y/y to 813,000 MT. In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags. Conversely, the USDA's FAS on May 19 projected that Vietnam's 2025/26 robusta coffee crop would climb +7% y/y to a 4-year high of 30 million bags.
The USDA's biannual report on December 18 was mixed for coffee prices. The USDA's Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags. The USDA's FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24.
For the 2025/26 marketing year, Volcafe projects a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.
