Daily Coffee Market Report (25 March 2026): Coffee Futures Decline on Technical Pressure While Supply Outlook Signals 2026 Downturn
Coffee futures moved lower on March 25, 2026, in a session largely dictated by technical factors rather than new fundamental developments. Both arabica and robusta markets recorded declines in nearby contracts, although price action remained contained within established ranges, reinforcing the perception that the market is undergoing a correction rather than a structural shift.
On ICE Futures Europe, robusta futures closed weaker, with the May contract falling by $33 to $3,629 per ton, a decline of roughly 0.90%, while July lost $24 to settle at $3,557 per ton. The session began slightly lower and briefly attempted a recovery, reaching a high of $3,672, but selling pressure quickly resumed and pushed prices down to an intraday low of $3,611. Despite the decline, the market continued to hold above the key $3,600 level, suggesting that underlying support remains intact.
A similar pattern was observed in arabica futures on ICE Futures US. The May contract declined by 175 points to close at 316.10 cents per pound, while July slipped to 309.70 cents per pound. Trading activity was relatively contained, with the May contract fluctuating within a narrower range of approximately 735 points. Importantly, prices held above the psychological threshold of 310 cents per pound, indicating that buyers are still active at lower levels and that the broader upward structure has not yet been compromised.
Market participants broadly described the session as technical in nature, with price movements reflecting chart-based adjustments rather than reactions to new information. After several volatile sessions, the market appears to be stabilizing within familiar levels, with gains on one day often followed by corrective moves on the next. In New York, attention remains focused on the 320 cents per pound region, which aligns with the 200-day moving average and could act as a trigger point for renewed buying interest if breached.
Fundamentally, the landscape remains largely unchanged. Physical availability of coffee continues to be relatively tight, providing an underlying layer of support to prices. In Brazil, sellers have shown limited urgency, holding back volumes while awaiting more favorable pricing conditions. Spot indications for high-quality arabica in southern Minas Gerais remain near R$ 2,200 per bag, reflecting this cautious stance among producers. At the same time, certified stocks on ICE Futures US rose modestly to 544,659 bags, and Brazilian export flows remain below last year’s pace, with shipments in March down nearly 17% year-on-year.
Weather conditions in Brazil have also remained stable, with hot temperatures and only sporadic rainfall reported across producing regions. While not currently a source of concern, these conditions continue to be monitored closely, particularly as the market approaches the next harvest cycle.
One emerging factor drawing increasing attention is the rise in production costs, particularly related to fuel. According to Cepea, diesel prices in key producing states have increased sharply in March, with gains of up to 23% recorded in Minas Gerais. Given the growing reliance on mechanized harvesting in Brazil, this trend could significantly impact production economics, potentially raising harvesting costs by around 15% if sustained. While not yet a direct driver of price formation, this cost pressure introduces an additional layer of support by potentially discouraging aggressive selling.
In the broader macro environment, geopolitical tensions in the Middle East remain present but did not exert a significant influence on coffee prices during the session. Ongoing developments involving Iran, Israel, and the United States continue to be monitored, particularly due to their potential impact on energy markets and input costs, but for now, their effect on coffee pricing remains indirect. Oil prices eased slightly during the day amid speculation of a possible ceasefire, contributing to a more subdued macro backdrop.
Despite the relative stability in the short term, longer-term expectations point to a markedly different scenario. A survey conducted by Reuters indicates that coffee prices could decline substantially by the end of 2026. Analysts project arabica prices to fall to around 225 cents per pound, representing a drop of nearly 30% from current levels, while robusta is expected to decline to approximately $2,500 per ton. These projections are primarily driven by expectations of a significant increase in global supply, particularly from Brazil, where the 2026/27 crop is forecast to reach 74 million bags, up by 10 million bags from the previous season. Vietnam is also expected to maintain strong production levels, further contributing to a looser global balance.
This divergence between short-term support and longer-term bearish expectations is also reflected in the forward curve. While nearby contracts remain under pressure, deferred positions from late 2026 onwards have shown relative strength, suggesting that the market is gradually incorporating expectations of improved supply conditions.
The coffee market currently sits at an inflection point. In the near term, tight availability, firm producer behavior, and rising costs continue to provide support, limiting downside potential despite technical corrections. However, looking further ahead, the prospect of expanding production and insufficient demand growth points to a more bearish structural outlook. The interplay between these opposing forces is likely to define price behavior in the months ahead.
