{"id":130242,"date":"2025-09-03T17:42:09","date_gmt":"2025-09-03T17:42:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/130242\/"},"modified":"2025-09-03T17:42:09","modified_gmt":"2025-09-03T17:42:09","slug":"dollar-weakness-spurs-short-covering-in-coffee-futures","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/130242\/","title":{"rendered":"Dollar Weakness Spurs Short Covering in Coffee Futures"},"content":{"rendered":"

December arabica coffee (KCZ25<\/a>) today is up +1.95 (+0.53%), and November ICE robusta coffee (RMX25<\/a>) is up +32 (+0.73%).<\/p>\n

Coffee prices are moving higher today, with robusta recovering from a 1.5-week low. \u00a0Dollar weakness (DXY00<\/a>) today has sparked some short covering in coffee futures.<\/p>\n

Don\u2019t Miss a Day: From crude oil to coffee, sign up free for Barchart\u2019s best-in-class commodity analysis.<\/a> <\/p>\n

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Above-average rainfall in Brazil has eased coffee crop concerns ahead of the all-important flowering period this month and is bearish for prices. \u00a0Somar Meteorologia reported Monday that Brazil’s largest arabica coffee-growing area, Minas Gerais, received 10.1 mm of rain during the week ended August 30, or 163% of the historical average. \u00a0<\/p>\n

Harvest pressures in Brazil are also bearish for coffee prices after Brazil’s Cooxupe coffee co-op announced Tuesday that the harvest among its members was 94.9% complete as of August 29. \u00a0Cooxupe is Brazil’s largest coffee cooperative and Brazil’s largest exporter group. \u00a0Separately, Safras & Mercado reported on August 22 that Brazil’s overall 2025\/26 coffee harvest was 99% complete as of August 20, ahead of the comparable level of 98% last year. \u00a0The breakdown showed that 100% of the robusta harvest and 98% of the arabica harvest were complete as of August 20.<\/p>\n

Coffee prices have rallied sharply over the past month and posted 3.5-month highs last Thursday due to concerns about tighter supplies and weather conditions in Brazil. \u00a0ICE robusta coffee inventories fell to a 1-month low of 6,552 lots last Thursday. \u00a0Also, ICE-monitored arabica inventories fell to a 1.25-year low of 699,404 bags on Tuesday.<\/p>\n

Coffee prices also have support due to concerns about tighter US coffee supplies, as American buyers are voiding new contracts for purchases of Brazilian coffee beans because of the 50% tariffs imposed on Brazilian exports to the US. \u00a0This is tightening the coffee supply in the US market, as about a third of unroasted coffee comes from Brazil.<\/p>\n

Reduced exports from Brazil are supporting prices. \u00a0On August 6, Brazil’s Trade Ministry reported that Brazil’s July unroasted coffee exports fell -20.4% y\/y to 161,000 MT. \u00a0In related bullish news released last Wednesday, Brazil’s green coffee exports in July fell -28% y\/y to 2.4 million bags, according to exporter group Cecafe. \u00a0Cecafe reported that July arabica exports fell -21% y\/y, while robusta exports plunged -49% y\/y. \u00a0Cecafe said Brazil’s July coffee exports fell -28% to 2.7 million bags, and that coffee shipments during Jan-July fell -21% to 22.2 million bags.<\/p>\n

As a bearish factor, the International Coffee Organization (ICO) reported August 6 that global June coffee exports rose +7.3% y\/y to 11.69 million bags. \u00a0However, cumulative Oct-Jun coffee exports were down -0.2% y\/y at 104.14 million bags.<\/p>\n

Due to drought, Vietnam’s coffee production in the 2023\/24 crop year decreased by -20% y\/y to 1.472 MMT, the smallest crop in four years. \u00a0Also, Vietnam’s General Statistics Office reported that 2024 Vietnam coffee exports fell by -17.1% y\/y to 1.35 MMT. \u00a0 Additionally, the Vietnam Coffee and Cocoa Association reduced its 2024\/25 Vietnam coffee production estimate to 26.5 million bags on March 12, down from a December estimate of 28 million bags. \u00a0By contrast, the Vietnam National Statistics Office reported last Tuesday that Vietnam’s Jan-Jul 2025 coffee exports were up +6.9% y\/y to 1.05 MMT.<\/p>\n

The USDA’s Foreign Agriculture Service (FAS) projected on June 25 that world coffee production in 2025\/26 will increase by +2.5% y\/y to a record 178.68 million bags, with a -1.7% decrease in arabica production to 97.022 million bags and a +7.9% increase in robusta production to 81.658 million bags. \u00a0FAS forecasted that Brazil’s 2025\/26 coffee production will increase by +0.5% y\/y to 65 million bags and that Vietnam’s 2025\/26 coffee output will rise by 6.9% y\/y to a 4-year high of 31 million bags. \u00a0FAS forecasts that 2025\/26 ending stocks will climb by +4.9% to 22.819 million bags from 21.752 million bags in 2024\/25. \u00a0However, Volcafe is projecting a global 2025\/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024\/25 and the fifth consecutive year of deficits.\u00a0<\/p>\n

On the date of publication,<\/p>\n

Rich Asplund<\/a><\/p>\n

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.<\/p>\n

For more information please view the Barchart Disclosure Policy<\/p>\n

here<\/a>.<\/p>\n

\u00a0<\/p>\n

More news from Barchart <\/p>\n

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n","protected":false},"excerpt":{"rendered":"December arabica coffee (KCZ25) today is up +1.95 (+0.53%), and November ICE robusta coffee (RMX25) is up +32…\n","protected":false},"author":2,"featured_media":130243,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[28,112],"class_list":["post-130242","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/130242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=130242"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/130242\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/130243"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=130242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=130242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=130242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}