Market Reports

Weather conditions across Brazil remain broadly favourable for harvesting, with temperatures forecast to stay seasonally mild across the southeastern coffee-growing regions. The Brazil Real currency has strengthened by 6.60% against the US Dollar since the beginning of 2026, a stronger Brazil Real traditionally discourages export selling from Brazil’s coffee producers.  The market within the interior continues to reflect price resistance, and a reticence of well financed producers to participate given the current market volatility.

The prompt New York arabica contract remains susceptible to volatility as historically low ICE certified stocks continue to provide speculative support to the market. This has maintained strength in the nearby spreads, highlighting the ongoing tightness in physical arabica availability despite seasonal harvest in the world’s largest coffee producing nation, Brazil. Within Brazil the local market holds out for higher highs even as the current crop harvest increases pace.  This while forward commitments for shipments build momentum, and the prevailing illiquid and volatile futures market dissuades producers from actively participating as volume sellers.  There is further to the physical fundamental squeeze; as the Brazil new arabica crop is arguably not yet tangible in any pipeline supply;  an increasingly wide spread between the New York arabica prompt month and the rest of the board. This contributes to costly and heightened forward risk, while the northern hemisphere consumer markets experience a lack of short-term top up cover in nearby supply and origin sellers attempt to chase the front month premium.  The European markets are in summer holiday mood and perhaps this provides some respite from the activity and velocity with which the futures markets are currently reacting to the low inventory in these markets.

The Certified washed arabica coffee stocks held against the New York exchange were seen to decrease by 18,507 bags yesterday, to register these stocks at 292,810 bags, with 68.85% of these certified stocks held in Europe, at a total of 201,597 and the remaining 31.15% being held in the USA at a total 91,213 bags. Of this, a total 6,714 or 2.29% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 30.70% of these certified coffees, from Honduras at 89,892 bags and 19.63% from Peru at a total 57,482 bags. The pending grading remained unchanged on the day, registering 0 bags pending grading.

The September 2026 to September 2026 contract arbitrage between the London and New York markets widened yesterday, to register this at 152.23 Usc/Lb. This equates to 46.90% price discount for London robusta coffee.

It was a firmer day on the commodity markets yesterday, while the US Dollar continued a softer track reaching, down 0.2% on the day, traditionally a bullish factor for commodities traded in other currencies.  The Coffee, Sugar, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the Cocoa, Corn, Soybean, Sugar and Wheat ended the day on a softer note. The day starts with the US Dollar trading at 1.329 Sterling, at 1.137 to the Euro and with the US Dollar buying 5.106 Brazil Real.

The London market started the day yesterday trading in modest firmer territory before quickly gaining support to trade in positive territory, while the New York market opened on a steady firm note. The volume in both New York and London market picked up steam during the early session, in limited speculative seller participation.  As the afternoon progressed the markets steadily continued to make gains, bringing fresh volume to New York to accentuate the moves for the session.  The New York and London markets registered significant gains through the late afternoon session. The New York market continued upward momentum, before being late in the day, to see the market drop back and settle on a firm note at the close, with more than half of the earlier gains of the day intact. The London market also dropped back from the earlier highs of the day to settle on a firmer note at the close, with less than half of the earlier gains of the day intact.

The London market ended the day on a positive note, with 48.27% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 54.71% of earlier gains of the day on the intact. This follow through very firm close, with the speculative sector, macroeconomics and currency fluctuations continue adding to the volatility within the markets, in a follow through good volume day, with the markets possibly due for a follow through steady buoyant start to early trade today, against the prices set yesterday, as follows: