Coffee
Coffee
Price movements (monthly)
ICE NY Futures Prices (M0)
Month-on-month Change
Year-on-year Change
ICE London Futures Prices (M0)
Month-on-month Change
Year-on-year Change
- NY “C” futures front month contract fell a little in July. While prices in July were -1% lower from the last month, they were also range bound between 280 and 315 c/lb.
- Weather conditions for most major producing regions remain largely favourable for the crop development, with no major impact as such.
- Around 20,000 hectares of coffee was affected by a hailstorm last week in parts of Minas Gerais (SDM, ZDM, and CER) and São Paulo states. Expana’s initial estimate is that only minor damage resulted possibly leading to yield losses of 50,000 - 150,000 bags for the 2026/27 productive potential.
- London robusta futures saw substantial losses during the month (-10%), driven in part by increased certified stocks.
- London prices were the lowest since Mar ’24 on 29th July at $ 3,345/mt.
- Our crop surveys in Vietnam point to a record crop in 2025/26 season at 31.5 mn bags due to excellent farm care and favourable rainfall, though weather has remained very wet in the second half of July because of a typhoon in the South China Sea.
- Other major robusta origins like Indonesia have their harvest in full swing.
Coffee
Price drivers
NY Certified Stocks
There have been significant draws of stocks during the month of July (-65,708 bags from the 30-Jun to 31-Jul or -8%). Interesting to note that US stocks which are already customs cleared (duty paid) were moving a trend we believe will accelerate. There are 77,311 bags of Certified coffee in US Ports as per the 31-Jul.
London Certified Stocks
In contrast to NY stocks in London have increased significantly (+1,826 lots / 312,167 bags from 30-Jun to 30-Jul) and are now at levels that have not been seen since Jun-23. All the increases were in Antwerp and whilst we must wait until the end of the month to confirm whether these stocks are transition stocks (EUDR compliant) initial indications are that they are transition stocks.
Origin Differentials
While the EBP for Colombian Excelso differentials rose from +15 c/lb at the end of June to +17 c/lb at the end of July, Brazilian arabica differentials showed no change throughout the month.
By the end of July, robusta differentials for Vietnam grade 2 5% black & broken (series CDV1) jumped to +$250/mt as a function of very limited liquidity and thin volumes.
Speculative Positions
In NY there was very little change in the spec position over the course of the month and as per the last published data on 29th July they were 49,424 lots long a change of -1,822 lots from the 24th June data.
At the same time the commercials reduced their net long position by -2,717 lots from net -9,270 lots short to -11,078 lots net short. This is the first time in four months that they have been net sellers.
In London The net spec continued reducing their net long position and sold -4,146 lots going from a net long of +6,317 lots to a net long of 2,161 lots as per the 29th July data.
The producer merchant increased their net long position from +2,953 lots to +9,826 lots an increase of +6,873 lots.
Currency
By the end of July, BRL was weaker against the dollar, ending at R$ 5.57 per dollar, up from R$ 5.43 per dollar at the end of June.
The Arabica price in BRL terms closed the month at R$ 16.53 / lb, a little down from R$ 16.53 / lb a month ago.
The US dollar index (DXY) ended the month at 99.97, 3.09 points higher than a month ago.
Coffee
Price forecast: Arabica
Arabica prices have experienced quite a steep decline since April, down around 20%. This could be the start of a more significant price decline and the end of the medium-term uptrend. It is likely at this point we have seen the peak of the long-term uptrend, but it is too soon to say this with complete confidence.
Our fundamental models support the idea of a price decline, as prices are in a significant bubble. Eventually, prices are likely to fall to what is deemed a fair level around the cost of production. The seasonal expectation is that prices will decline at the start of Q4, which further
supports the idea of the price decline continuing. Speculators continue to trim their long positions, as they have been throughout 2025. This means they are sceptical that the long-term price increase will continue.
Looking at the technical analysis, there have been some warning signs that prices are near a significant peak. The long-term RSI hit an extreme level, above 90. This is often paired with a significant price peak. It should be seen more as a ticking clock that a steep decline will begin at some point, but it does not mean it needs to happen straight away. For now, we do not want to begin any new hedges, but there may be an opportunity to initiate a small hedge in the coming months if we see the right set of signals.
Coffee
Price forecast: Robusta
The decline in robusta prices has been steep over the last month, with prices down around 25%. Fortunately, we have managed to advise against hedging throughout this period. Part of the downward price action is attributed to a large crop anticipated in the top robusta producer, Vietnam, which raises expectations of a record crop for 2026 to 2027. This is one of the reasons we have been forecasting a steep price decline. Another factor contributing to the price decline is that funds are trimming their long positions. We typically see a bit of a price increase sometime in Q3, but this is likely to be just a small correction in the ongoing price decline.
Prices are now in a long-term downtrend. This is significant, as it means that it is unlikely we will see prices exceed the peak set in Q1 of 2025. This does not mean there could not be some sort of price rally in Q3, and that is our expectation. The question is: what will be the amplitude of this increase, and will we be able to hedge it?
Coffee
Market sentiment (for the month ahead)
Tight global stocks
There are some discrepancies among market players regarding forecasts for final ending stocks, with some estimates coming out higher than last year. Sources expect purchasing/tenders throughout the marketing year to dictate the final figure and any price movement that could come as a result.
↓ Increased Global production
Global barley production is forecasted by the USDA to increase by 2.4 million mt to a total of 145.8 million mt in the 2025/2026 season. Market players say that the expected jump in production is due to a rebound from adverse weather conditions in the previous marketing year. Sources stated that better soil moisture in Russia and consistent rainfall in most of Europe (although northern parts are becoming a concern) drove production estimate increases in 2025/2026. Sources say that if trends of increasing production continue, it could weigh on prices.
↑ Dryness in Ukraine
Sources say that between March and June, Ukraine experienced substantial precipitation deficits, with below usual rainfall throughout the period and unexpected frosts in May driving concerns in the market. As a result, the USDA has forecasted a slightly smaller crop in Ukraine (see page 5) . Furthermore, sources believe that China’s demand for Ukrainian barley will increase in the 2025/2026 season, citing purchases of around 500,000 mt (as of May 22). Market participants believe that this could lend some support to prices.
↑ Increased demand
Market players believe that among the top importers, there will be a push to secure supplies in the 2025/2026 season. Industry insiders believe that China are likely to increase purchases to replenish stockpiles, and that this could also be the case for Turkey, as domestic production is expected to decrease and imports are projected from the USDA to increase by up to 850,000 mt in 2025/2026. Market players suggest that this could lend some support to prices, provided that decreased demand from the Middle East, due to higher corn availability for feed as opposed to barley, does not offset potential demand increases from China or Turkey.
↑ World Barley Stocks Lowest since 2005/2006
According to market players, 2024/2025 Global barley stocks are still expected to conclude at their lowest level since 2005/2006. Sources believe that this is due to barley prices remaining competitive throughout the season despite smaller (2024/2025) global harvests. For 2025/2026, ending stocks are projected at the same level amid a slight uptick in production. Market players believe that increases in demand, alongside a tighter balance sheet, could lend support to prices.
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