Market Reports

A Reuters poll released yesterday has drawn from various sources to report the October 2025 to September 2026 global coffee supply demand situation is anticipated to end with a narrow surplus of 1.70 million bags. The poll also concluded that global coffee supply is seen to be in a surplus of 8.20 million bags for the coming October 2026 to September 2027 coffee year.

While in terms of the global coffee supply factor and while the poll concluded that the current July 2026 to June 2027 Brazil crop is likely to be around 75 million bags or 17.18% higher year on year. A factor which one might note is already for the most part, a factor that is absorbed by the markets.

The poll has reported that production from the coming Vietnam October 2026 to September 2027 crop year will reach 31 million bags or on par with the current 2025/2026 year.  The poll concluded that the median forecast, with these two largest coffee producers in full flow could see the New York futures coffee market cool off slightly toward the end of this year, indicating a likelihood that the New York market will be trading at around 300 usc/Lb or down 12.20% from yesterdays close and the London market conversely at around US$ 3,900.00 per Mt., or up slight at 2.56% from yesterdays close, by the end of the year.

While the Reuters poll median of sources reflects the view of a softer New York market is a related to the larger Brazil production and to some extent complimented by the Vietnam crop harvest to start toward the end of the year. A sizeable Brazilian crop may be seen as necessary, not only to satisfy domestic demand but also to supplement limited local inventory, while this leading producer and exporter of arabica coffee to consumer markets worldwide, will aim to maintain export market share of roughly 43 million bags to key consuming markets.  With limited internal carryover stocks, strong internal domestic consumption demand and export market dominance to coffee consumer markets, one might argue that the 2026/27 crop is necessary to replenish consumer market pipeline stocks.  Key to the next moves on the futures markets, which by nature always look ahead, will be the extend to which the anticipated El Nino weather event could potentially impact the prospects for the flowering of the 2027/28 crop during the last quarter of the year.

The coffee futures markets had a strong upward rally yesterday, with speculative buying and widespread short covering. The New York December 2026 arabica contract surged by 5.89%, reaching a high on the day on 342.55 Usc/Lb, while the London November 2026 Robusta position increased by 5.09% to settle at US$ 3,802.00 per Mt. One might comment that the ongoing weather uncertainty is expected to keep coffee markets highly volatile in the weeks ahead.  This bullish run supported by the still prevalent tight inventory position in consumer markets and a vacuum of producer selling activity, which in volume terms and for the moment, is predominantly in Brazilian hands.The Certified washed arabica coffee stocks held against the New York exchange were seen to decrease by 1,750 bags yesterday, to register these stocks at 226,242 bags, with 73.71% of these certified stocks held in Europe, at a total of 166,763 and the remaining 26.29% being held in the USA at a total 59,479 bags. Of this, a total 7,068 or 3.12% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 26.21% of these certified coffees, from Honduras at 59,282 bags and 22.20% from Peru at a total 50,221 bags. The pending grading remained unchanged on the day, registering 1,920 bags pending grading.

The November 2026 to December 2026 contract arbitrage between the London and New York markets widened yesterday, to register this at 169.19 Usc/Lb. This equates to a 49.52% price discount for London robusta coffee.

It was a mixed day on the commodity markets yesterday, ahead of this week’s Jackson Hole Symposium which may provide cues on interest rate direction. The Coffee, Corn, Soybean, Sugar, Gold and Palladium markets ended the day on a firmer note, while the Cocoa, Wheat, Silver and Platinum markets ended the day on a softer note. The day starts with the US Dollar trading at 1.362 Sterling, at 1.166 to the Euro and with the US Dollar buying 5.158 Brazil Real.

The New York and London markets opened the day on a positive note, to see the markets continue to trade in modest firm territory throughout the remainder of the early morning session in limited trade volume to start the day. The New York market fell back off the highs of the morning for a brief period before finding support during the late morning session, to trade firmer. The London market continued to trade in positive territory, making gains throughout the session. As the afternoon progressed, the New York market continued to trend in a firmer direction, where buyers returned to the floor in the absence of sellers, the day tracked quickly higher to trigger buy stops along the way.  This firmer action continued in both the New York and London markets as the day progressed.  The upward moment in New York in a market void of volume on the sell side, saw the market continue the upward momentum before being capped late in the day, to see the market settle on a firm note at the close with most of the earlier gains of the day intact. The London market followed suit to also settle on a firm note at the close, with most of the earlier gains of the day intact.

The London market ended the day on a very positive note, with 92.46% of the earlier gains of the day intact, while the New York market likewise ended the day on a positive note with 87.50% of earlier gains of the day intact. The firmer close for the markets, with both the New York and London markets trading in firmer territory to settle near to the highs of the day in a heavy volume day.  With the speculative sector at the helm and aggressive fund buying at play, the markets might be in for a follow through steady start to early trade today, against the prices set yesterday, as follows: