Market Reports

The traditionally conservative Brazil government food supply and statistics agency CONAB have come forth to revise their initial forecast for the current Brazil 2026 coffee crop that has just completed harvest, to be 1.35% higher.  CONAB predict the Brazil 2026/27 coffee year to now total 67.60 million bags or 19.65% larger year on year.  CONAB has reported that this higher revision is mainly due to consistent and conducive climate during the crop development phase resulting in positive flowering receiving in the fourth quarter of 2025, in both the conilon robusta and arabica regions, which following the completion of the harvest has led to their revision of an already large crop to be higher than initially estimated.

The updated CONAB forecast, has revised the Brazil arabica coffee production 5.24% higher than the previous forecast earlier this year to reach a potential total 48.20 million bags.  Their estimate for the conilon robusta production forecast is revised 7.18% lower than the initial forecast earlier this year to now total 19.40 million bags.  This forecast should it come about, is indicated to be 6.60% lower when compared to the production performance in the Brazil conilon districts in the previous coffee year. The CONAB forecasts are traditionally conservative, and some might say, historically around 15% below other median forecasts. Thus, there is a likelihood that this forecast is indicative of the median forecast for the current Brazil crop that is already mostly absorbed by the markets, and that the Brazil 2026 coffee crop, with arabica closer to 50 million bags and conilon robusta closer to 25.50 million bags, may well reach closer to 75.50 million bags, in line with the forecasts from a number of independent organisations.

The same report which gathers and correlates extensive survey data and vast regions in the interior for information, has assessed that coffee yields as an average for both arabica and conilon robusta in Brazil, will increase by 13.80% from the 2025 year to register 34.60 bags or 2.08 tons per hectare for the 2026 year.  The earlier start to the conilon robusta has supported internal roaster demand, while the delayed start to the Brazil arabica coffee harvest and the unanticipated supply pressure that brought to the market, has since subsided.   Brazil 2026 coffee exports are expected to reach similar performance as in the bumper arabica crop in 2020/21.  The contrast from that last bumper production year, to this, is that the coffee is necessary to supplement extremely low arabica inventories in consumer countries.

Brazil semi-washed arabica qualities can be registered to the board and are beginning to show in the number of bags pending grading to the certified warehouses of the exchange, to signify a start of a rebuild from the two year low recorded earlier this month. Although there remains a constraint in the options from any other origin that has an October seasonal start to the year, and with no other coffee anticipated to come to the board in any volume soon, Brazil is likely to dominate the pending grading and certified stocks for some time to come.

Meanwhile, the rainfall experienced during the last number of weeks has seen soil moisture levels at good levels in the arabica regions.  Weather conditions will continue to be monitored in the weeks and months ahead to evaluate the success rate of the flower and pinhead set, and therefore potential for the next, 2027/28 Brazil coffee crop that will harvest in April/May 2027 in the conilon robusta areas and June/July 2027 in the arabica areas.

The Certified washed arabica coffee stocks held against the New York arabica market registered a marginal decrease of 176 bags yesterday, to register these stocks at 254,304 bags, with 78.52% of these certified stocks held in Europe, at a total of 199,692 bags and the remaining 21.48% being held in the USA at a total 54,612 bags. Of this, a total 52,791 or 20.76% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil semi-washed arabica, and a further 21.10% of these certified coffees, from Honduras at 53,663 bags and 19.11% from Peru at a total 48,598 bags. The pending grading remained unchanged on the day, registering 21,117 bags pending grading, with 92.09% pending grading from Brazil.

The November 2026 to December 2026 contract arbitrage between the London and New York markets widened yesterday, to register this at 126.12 Usc/Lb. This equates to a 45.80% price discount for London robusta coffee.

It was a softer day on the commodity markets yesterday, while the leading in influence Oil markets firmer on the day, in a week overshadowed by macroeconomic indicators, politically influenced inflationary pressures and interest rate developments within largest consumer market USA.  The Cocoa, Platinum and Palladium markets ended the day on a firmer note, while the Coffee, Corn, Soybean, Sugar, Wheat, Gold and Silver markets ended the day on a softer note. The day starts with the US Dollar trading at 1.322 Sterling, at 1.138 to the Euro and with the US Dollar buying 5.192 Brazil Real.

The London and New York markets started the day yesterday trading to the south of par on softer notes from the outset of the day. The direction in London was set early, to see the London market drop back further and track lower, as the early morning progressed. The New York market continued to trade on negative territory for the remainder of the morning session. As the afternoon progressed both the London and New York markets continued to trade below par, as selling pressure increased. The activity in both markets was modest as the afternoon progressed with New York finding support to recover from the early lows and set a new high for the day in modest positive territory, the London market followed suit to likewise set a new high for the day’s session before encountering resistance to reverse the trend and track lower. The London market traded in softer territory for the remainder of the days’ session, before finding support near to the lows of the day. The New York market was also seen to trade back towards par during the late afternoon session. This support continued through to the close, with the New York market trading back towards par to settle on a softer note at the close with less than half of the earlier losses of the day intact. The London market was seen to settle on a softer note at the close, with less than half of the earlier losses of the day intact.

The London market ended the day on a negative note, with 50.94% of the earlier gains of the day intact, while the New York market ended the day on a likewise negative note with 14.10% of earlier gains of the day intact. This softer close for the markets, does little to inspire confidence, albeit that the markets recovered from the lows of the day during what was a relatively light trade volume session, and one might think that the markets are due for a steady start to early trade today, against the prices set yesterday, as follows: