What's Driving Coffee Futures Quotes Lower: Supply Surge and Currency Shifts

Arabica and Robusta Face Pressure From Multiple Headwinds

March arabica coffee futures are trading down 3.70 points, representing a 1.05% decline, while January robusta coffee futures have dropped 126 points or 3.20%. This extended pullback extends a two-week downtrend, with arabica sliding to 2-month lows and robusta retreating to 4-month lows. The dual-contract weakness reflects a convergence of bearish factors reshaping the coffee futures quotes landscape.

Brazil’s Weather Pattern Reshapes Arabica Outlook

Heavy precipitation across Brazil’s coffee-growing regions has fundamentally altered near-term supply concerns. Climatempo issued a Monday alert forecasting intense, persistent rainfall throughout the week in critical growing areas. The impact proved immediate: Minas Gerais, which produces the largest share of Brazil’s arabica, accumulated 79.8 mm of rainfall in the week ending December 12—exceeding the historical average by 155%. While crop development concerns have eased, market participants are now fixating on the abundance signal these rains represent.

Conab, Brazil’s agricultural forecasting body, amplified this narrative on December 4 by raising its 2025 production estimate by 2.4% to 56.54 million bags, up from September’s 55.20 million bags projection. The higher output estimate collides directly with coffee futures quotes, accelerating the downward momentum.

Currency Dynamics Add Fresh Selling Pressure

The Brazilian real’s weakness has emerged as an unexpected catalyst. On the same day coffee futures quotes deteriorated, the Brazilian real hit a 4.25-month low versus the dollar. A weaker real incentivizes Brazilian coffee producers to accelerate export sales, flooding markets with supply precisely when coffee futures quotes are already under siege. This currency effect compounds the weather-induced supply narrative, creating a double headwind for price stability.

Vietnam’s Export Boom Weighs on Robusta Coffee Futures Quotes

Robusta faces its own supply challenges. Vietnam’s National Statistics Office reported November coffee exports surged 39% year-over-year to 88,000 MT, with January-through-November shipments rising 14.8% year-over-year to 1.398 million metric tons. Looking ahead, Vietnam’s 2025/26 production is projected to climb 6% year-over-year to 1.76 MMT (29.4 million bags), marking a 4-year high. The Vietnam Coffee and Cocoa Association suggested output could reach 10% above the prior year if weather cooperates.

This production trajectory for the world’s largest robusta producer creates structural headwinds for coffee futures quotes in the robusta contract.

Inventory Dynamics Present Mixed Signals

ICE-monitored arabica inventories fell to 1.75-year lows of 398,645 bags on November 20, though they recovered to 426,523 bags by December 5—a 5-week peak. ICE robusta inventories hit 11.5-month lows of 4,012 lots last Wednesday. Shrinking warehouse stocks typically support prices, but they’re being overwhelmed by production forecasts and currency effects.

US buyers have gradually re-engaged with Brazilian coffee following tariff relief, though the window of high tariffs left its mark. August-through-October purchases—when Trump-era tariffs were in effect—dropped 52% to 983,970 bags compared to the year-prior period. US coffee inventories remain tight despite reduced Brazilian inflows, but this hasn’t proven sufficient to offset global supply momentum affecting coffee futures quotes.

Global Supply Picture Remains Expansionary

The International Coffee Organization reported on November 7 that global coffee exports for October-September marketing year dipped just 0.3% year-over-year to 138.658 million bags. The USDA’s Foreign Agriculture Service projects 2025/26 world production will expand 2.5% year-over-year to a record 178.68 million bags. Within this total, arabica output is forecast to decline 1.7% to 97.022 million bags while robusta production surges 7.9% to 81.658 million bags.

Brazil’s output is pegged to rise 0.5% year-over-year to 65 million bags, and Vietnam’s crop is expected to climb 6.9% year-over-year to 31 million bags. Against this backdrop of rising inventories—2025/26 ending stocks are projected to climb 4.9% to 22.819 million bags from 21.752 million bags in 2024/25—coffee futures quotes face structural resistance.

Market Takeaway

The confluence of Brazilian weather relief, currency weakness, Vietnamese export momentum, and record production forecasts has created an environment where coffee futures quotes are repricing toward lower equilibrium levels. While tighter ICE warehouse balances and reduced US tariff barriers provide technical support, the weight of global supply expansion appears decisive in the near term.