Arabica Rises 1.03% After Three-Day Slide but Still Posts a 3.04% Weekly Loss (28 August 2026)
Arabica futures in New York returned to positive territory on Friday after three consecutive sessions of heavy selling, although the recovery was not large enough to reverse the week’s decline. The December contract gained 320 points, or 1.03%, to settle at 312.85 cents per pound. It nevertheless finished the week 3.04% lower, suggesting that Friday’s move represented stabilisation rather than a confirmed change in trend.
December arabica traded between 308.70 and 317.00 cents per pound, an intraday range of 8.30 cents. Selling initially drove the contract below 310 cents before buying interest returned and carried prices towards the session high. Turnover remained relatively modest at approximately 19,000 lots.
The March contract added 230 points to close at 300.60 cents per pound after moving between 297.55 and 304.95. London robusta moved in the opposite direction: November lost $26 to settle at $3,529 per tonne, while January declined by $23 to $3,518 per tonne.
Brazilian Producers Remain Reluctant Sellers
Buyer interest remained firm across Brazil’s physical arabica market, but trading stayed below the usual seasonal pace. According to the Carvalhaes Office in Santos, activity was particularly quiet from Wednesday through Friday because the sharp movements on ICE left buyers and sellers struggling to establish workable prices.
Offers remained below the expectations of many growers, keeping them on the sidelines except when cash-flow needs required a sale. This left transaction volumes unusually thin even as new-crop coffee continued to reach the market. The indicative price for good-quality coffee in southern Minas Gerais remained close to R$1,930 per bag.
Currency movements also restrained the recovery in New York. The US dollar strengthened noticeably against the Brazilian real following renewed concerns about US inflation and interest rates. A weaker real increases the local-currency value of dollar-denominated coffee and can encourage producer or exporter selling, limiting gains in ICE futures.
Rain Returns to Brazil’s Coffee Belt
Weather is likely to regain importance as the market turns its attention from the current harvest towards conditions for the next production cycle.
Forecasts pointed to the formation of an extratropical cyclone over southern Brazil between Sunday, August 30, and Monday, August 31. The associated cold front was expected to advance towards the Southeast on Tuesday, bringing a wetter pattern to several coffee-producing areas. An Inmet forecast covering August 26 to September 11 indicated that meaningful rainfall could reach parts of the southeastern coffee belt.
The distribution was expected to remain uneven. Southern Minas Gerais and the Serra da Mantiqueira were projected to receive some of the highest totals. In the Cerrado Mineiro, the northern sector was expected to see less rain, while central, southern and southwestern areas could receive more significant amounts. Matas de Minas was also likely to experience variable rainfall, with wetter conditions favoured in the south. Some Chapada coffee areas were expected to remain comparatively dry, apart from light and isolated precipitation.
Rain at this stage can have mixed consequences. It may interrupt the final stages of harvesting and slow the drying of beans, increasing the risk of quality problems. At the same time, moisture returning after a dry period can stimulate early or uneven flowering, making the timing and follow-up distribution of rainfall important for the 2027 crop.
El Niño Adds Another Layer of Uncertainty
Concern about El Niño is also building. Panama declared a national emergency in response to water stress, while El Salvador issued a nationwide red alert for drought after a prolonged dry spell and unusually high temperatures. Agriculture, water availability and Panama Canal operations are among the sectors exposed to the developing conditions.
During El Niño, warmer-than-usual Pacific waters can redirect winds and moisture across distant regions. The consequences vary by origin, but a strong event may increase the risk of damaging heat, prolonged dryness or excessive rainfall in major coffee-producing countries.
The size of the 2026 crop is becoming clearer, while the productive potential of the 2027 crop remains much less certain. Forecasts for the intensity and duration of El Niño are therefore likely to carry more weight as Brazil approaches its flowering period. Weather risk may support prices, although it is still too early to assume a specific production outcome.
Funds Stay Net Long as Certified Stocks Decline
The CFTC’s Commitments of Traders report for positions held on August 25 showed that managed money retained substantial bullish exposure in Coffee C futures. In the futures-only report, the category held 42,216 long contracts and 11,028 short contracts, leaving a net long position of 31,188 contracts.
The position leaves the market sensitive in both directions. Fresh weather concerns could encourage funds to rebuild bullish exposure, while a renewed technical breakdown could trigger further liquidation from an already sizeable net long.
Meanwhile, ICE-certified arabica inventories declined by another 35 bags to 223,976 bags. The exceptionally low level of exchange stocks continued to offer underlying support, even as expectations of improving global supply restricted the scale of Friday’s rebound.
Export Data Present a Mixed Supply Picture
Figures displayed by Cecafé through August 24 showed Brazilian coffee shipments of 1,707,729 bags, with a daily average of 71,155 bags. The total comprised 1,045,948 bags of arabica, 499,501 bags of robusta and 162,280 bags of soluble coffee.
These figures should be treated as provisional because Cecafé’s data feed was revised during the week.
Vietnam Customs reported July shipments of approximately 147,900 tonnes valued at $642.5 million. Volume increased by 17% from June and 44.4% from July 2025. Export value rose by 9.7% month on month and 15% year on year, showing that revenue growth continued to lag the expansion in tonnage.
Against this backdrop, Vietnam’s Ministry of Industry and Trade projects that full-year coffee shipments could rise by approximately 8% to 10% from 2025. Better domestic availability is supporting the volume outlook, but the possibility of greater worldwide supply means exporters may receive less value for each tonne sold.
That volume-value gap increases the importance of higher-margin processed products. It also gives Vietnamese suppliers a stronger incentive to improve traceability and meet the EU Deforestation Regulation, particularly because Europe remains a central market.
US Inflation Keeps Currency Markets in Focus
The macroeconomic backdrop also limited enthusiasm for a stronger coffee recovery. In his first keynote address as Federal Reserve chair at the Jackson Hole symposium, Kevin Warsh placed renewed emphasis on price stability and described recent inflation progress as insufficient.
The latest US personal consumption expenditures price index increased by 3.7% from a year earlier in July, remaining well above the Federal Reserve’s 2% objective. The remarks reinforced expectations that US monetary policy could remain tight and supported the dollar against several currencies, including the Brazilian real.
For coffee, the exchange-rate channel is important. A stronger dollar can pressure dollar-denominated commodities more broadly, while a weaker real can improve the incentive for Brazilian holders to sell coffee into the international market.
Wider Coffee-Sector Developments
Recent US consumption data continued to underline coffee’s importance in the beverage market. Gallup’s annual Consumption Habits survey found that 49% of American adults drink coffee at least once per day: 33% consume it once daily and 16% several times a day. Daily coffee consumption was highest among adults aged 65 and older, at 64%, compared with 25% among those under 30.
In the consumer-products segment, South Korea’s Dongsuh Foods continued to broaden its Kanu Barista capsule range. The brand, launched in the premium capsule market in early 2023, now offers 18 varieties across light, medium and dark roasts, as well as decaffeinated and single-origin options. The expansion reflects demand for convenient home-coffee formats and a wider choice of flavour profiles.