Coffee Futures Slide 2.3% as Brazilian Harvest Advances and Inventories Rise
ICE Coffee July 2025 contracts drop 2.33% amid improving harvest conditions and global supply buildup, though long-term deficits remain a concern
ICE Coffee C (July 2025) futures closed the week ending June 13 at ¢349.70 per pound, down ¢8.35 or 2.33% from the previous week. The contract saw volatile trading, influenced by favorable weather in Brazil and a stronger Brazilian real. While short-term sentiment soured due to rising inventories and harvest progress, long-term fundamentals still suggest potential supply constraints.
Weekly Price Summary
Beginning Price: ¢358.05 per pound
Ending Price: ¢349.70 per pound
Weekly Change: -2.33%
Pricing Outlook:Mixed Sentiment Amid Supply Surge and Long-Term Deficit Risks
Short-term bearish pressures dominate the market as Brazil’s harvest gains pace and ICE inventories climb. However, persistent structural deficits, especially in arabica, and tightening robusta stocks in Vietnam offer long-term price support. Market direction hinges on upcoming weather anomalies and speculative positioning.
Market Drivers
🔻 Bearish Influences
Harvest Progress in Brazil:
Brazil's 2025/26 harvest reached 35% by June 11. Robusta harvest is 49% complete, putting steady downward pressure on prices.
Rising Inventories:
ICE arabica stocks hit a 4.25-month high at 892,468 bags. Robusta inventories, while lower by June 13, had previously reached an 8.75-month high, underscoring ample supply.
Weather Improvements:
In Minas Gerais, 23.4 mm of rainfall (207% above normal) improved drought-affected zones, easing concerns around yield and boosting harvest efficiency.
Demand Concerns:
Major buyers including Starbucks and Mondelez have flagged potential demand hits due to the U.S. 10% import tariff on coffee products.
🟢 Bullish Counterweights
Strengthening Brazilian Real:
The currency hit an 8-month high, discouraging farmer selling and offering intermittent price support.
Vietnam’s Export Constraints:
Production for 2023/24 fell 20% YoY. Year-to-date exports are down 17.1%, and Jan–May shipments are off 1.8% YoY. Robusta inventories fell to a 3-week low of 5,184 lots.
Brazil Export Slowdown:
Cecafe data showed May exports plummeted 36% YoY, with Jan–Apr shipments down 15.5%, marginally supporting prices.
Arabica Deficit Risks:
Volcafe projects a global arabica deficit of 8.5 million bags for 2025/26—fifth straight shortfall—highlighting structural tightness despite current abundance.
Country-Level Market Insights
Vietnam
Despite only a 0.6% dip in export volume, Vietnam hit a record US$4.7 billion in coffee exports over the first five months, driven by price surges. However, local prices in the Central Highlands are weakening. Production is forecast to rise 6.9% to 31 million bags, with export targets set at US$7 billion for the year.
Brazil
Brazil continues to dominate, now promoting Rondônia’s Robusta as a resilient, high-yield option. In the Cerrado Mineiro, growers are adopting climate-adaptive Robusta strains. A stronger real and shifting climate are reshaping Brazil’s competitive edge and agronomic strategies.
Colombia
In Tolima and Antioquia, cooler and wetter conditions are increasing disease risks and delaying crop development. Cauca also faces delays due to chill and excess rainfall, while Huila and Caldas show stable to positive trends. Overall, weather volatility poses a risk to upcoming harvests.
Weather Conditions Overview
Brazil
Minas Gerais:
This key arabica-producing state of Brazil is experiencing unseasonably cold conditions, with average temperatures at 15.65°C-well below the norm of 18.43°C and colder than the previous 2010 record. Rainfall is slightly below historical averages, but the prior week saw above-average precipitation that eased drought concerns. However, the combination of lingering cold and residual soil moisture could delay cherry maturation and stress plant physiology.
Espírito Santo:
Cooler-than-average temperatures (18.96°C vs. 21.23°C) have combined with stable rainfall (0.93mm), but the sustained cold spell is nearing thresholds seen in prior yield-impacting years. Although not currently extreme, prolonged exposure may impair robusta plant development.
São Paulo:
The state remains moderately stressed with temperatures at 16.44°C, below seasonal norms but above historical danger levels. Rainfall rose slightly to 1.16mm, helping to moderate plant stress. Nonetheless, these conditions could delay ripening and prolong the harvest window.
Bahia & Rondônia:
Bahia is cooler and slightly drier than average, though risks are limited. Rondônia, a rising robusta hub, reports average rainfall and slightly elevated temperatures-currently a low-risk profile, though continued monitoring is warranted as the region’s production footprint grows.
Colombia
Tolima & Antioquia:
Tolima saw a sharp drop to 17.90°C with record-breaking rainfall of 11.22mm-more than twice its historical average. Fungal disease risk and flowering delays are now critical concerns. Antioquia posted even higher rainfall (14.35mm) and recorded its coldest-ever average temperature at 17.82°C, posing serious threats to bean development.
Colombia’s Cauca:
Slightly less extreme than Tolima but still problematic, with temperatures at 17.74°C and rainfall up to 16.37mm. These shifts can delay flowering and complicate pest management.
Huila, Caldas, Risaralda, Cundinamarca, Valle del Cauca:
Huila is marginally warmer and wetter, which may benefit flowering. Caldas is drier but shows stable warmth. Cundinamarca and Valle del Cauca are both cooler and wetter than average, necessitating observation for rot or disease risks. Risaralda remains stable but could deteriorate with further dryness.
Ethiopia
Oromia & Southern Nations of Ethiopia:
Oromia’s reduced rainfall (5.32mm vs. 7.97mm) and slight cooling threaten flowering stability. The Southern Nations region recorded the driest conditions on record for this period (3.97mm), raising alarms for water stress during critical bean development.
Technical Analysis
Double Top Confirms Downtrend; Coffee Futures at Risk of Further Breakdown
Coffee futures are exhibiting a textbook bearish reversal. The market has twice failed to sustain above ¢416.45/lb, forming a double top—first in February and again in April. Since then, momentum has weakened significantly.
Pattern Formation:
The double top is a strong reversal signal, particularly in the context of overbought RSI levels earlier this year. This week's close below the 50-day SMA confirms the trend shift.
Moving Averages:
50-day SMA: ¢367.70 – breached and now acts as resistance.
200-day SMA: ¢323.39 – key long-term support. If prices decline further, this becomes a vital level to watch for a potential technical bounce.
Support and Resistance Levels:
Immediate Support: ¢339.90 – neckline of the double top; a decisive break here would validate the pattern.
Next Support: ¢323.39 – aligns with the 200-day SMA.
Resistance Zones: ¢367.70 and the double top peak at ¢416.45.
Volume and Momentum:
Trading volume remains elevated, with 11,113 contracts traded on June 13, indicating active repositioning. Momentum indicators such as MACD and RSI are trending bearish, showing no immediate signs of reversal.
Outlook:
With price action consolidating just above key support, a downside break appears imminent. A breach below ¢339.90 opens the door for a sharper decline, potentially toward ¢323. If bulls fail to reclaim ¢367.70 soon, the bearish trend is likely to accelerate.
Conclusion
Coffee futures came under sustained pressure this week, with technical and fundamental signals turning increasingly bearish. While export constraints and currency effects provide temporary support, the ongoing harvest in Brazil and rebounding Vietnamese output continue to weigh on prices.
Watch for Next Week:
Brazil and Vietnam harvest pace
U.S. import tariff updates
ICE inventory movements
Price reaction near ¢339.90 support level
Weather risks in Minas Gerais and Colombian highlands
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