Coffee Futures Slide as Brazil Delivers a Larger Crop

Coffee futures are being pulled lower by a market that suddenly has more beans coming in and fewer buyers willing to chase them. December arabica futures recently touched a 2.5-month low near $2.8150 a pound, with chart momentum weakening as traders reassess the supply outlook.

Barchart said global coffee production is projected to rise 4% to a record 184 million bags, while consumption is expected to slip 1% to 180.6 million bags. That would leave roughly 3 million bags available to replenish inventories or weigh on prices, a sharp change from the shortage narrative that dominated the market earlier this year.

Brazil is central to the shift. A USDA Foreign Agricultural Service forecast puts the country’s 2026/27 coffee crop at 71.9 million 60-kilogram bags, up 14% from the previous season. Arabica output is expected to jump 25% to 47.5 million bags, supported by the crop’s biennial cycle, expanded acreage and improved weather during key development stages.

The supply is already beginning to show up in trade flows. StoneX reported record August exports from Brazil, while certificates of origin issued during the first 11 days of September exceeded the comparable period a year earlier for both arabica and conilon. More physical availability gives roasters and importers less reason to bid aggressively, especially after months of elevated prices encouraged substitution toward cheaper robusta beans.

The International Coffee Organization’s latest data captures the market’s split personality. Its composite price averaged 287.29 cents a pound in August, nearly unchanged from July, after a midmonth rally driven by El Niño concerns and tight arabica supplies faded when Brazilian rainfall improved. July global exports also rose to 12.23 million bags from 11.84 million a year earlier.

The bearish case is not risk-free. Brazil’s next flowering cycle still depends on timely rain, and the ICO continues to flag weather as a source of volatility. For now, though, traders are pricing the harvest in front of them. A decisive break below $2.8150 could expose December coffee to another leg lower, while a weather shock would quickly revive the scarcity premium.