Daily Coffee Market Report (26 Feb 2026): Coffee Futures Retreat as Supply Outlook Improves and Brazil Export Flow Accelerates

Expectations of a significant increase in global coffee supply pressured prices on international exchanges Thursday (26), leading to moderate declines. The downturn followed a report published Wednesday (25) by Rabobank projecting that worldwide coffee production will reach a record 180 million bags in the 2026/27 crop year — roughly 8 million bags more than the previous season. The prospect of expanded output reinforced the view that the market may be moving into a more comfortable supply phase after recent years of tightness.

Gil Barabach, market analyst at Safras & Mercado, noted that the price gap between Arabica and Robusta coffees has been narrowing. He recalled that Arabica prices spiked in 2024 due to crop losses, with the bullish trend extending into 2025. Now, in 2026, prices are adjusting as expectations of improved supply gain traction. Robusta followed a comparable trajectory: a sharp rally in 2024 driven by production setbacks in Vietnam, a correction in 2025 as output recovered, and a gradual return to more typical levels in the futures market this year.

According to coverage from Reuters, the recent downward movement in prices appears to be losing strength. Even so, Brazilian growers have shown limited interest in selling at current price levels, which has slowed market activity.

In areas tracked by Notícias Agrícolas, Brazil’s physical coffee market ended the day largely inactive. The only notable price adjustment was a 2.81% drop in Arabica Coffee Type 6 in Machado, Minas Gerais, where prices settled at R$ 1,730.00 per bag.

Weather

Weather conditions in Brazil during the first months of the year have been broadly favorable for the development of the 2026/27 coffee crop. According to agricultural engineer and consultant Jonas Leme Ferraresso, January and February followed a pattern considered normal compared to the last five years, with steady rainfall and moderate temperatures. This stability supported plant vigor and uniform crop development.

Data from Instituto Nacional de Meteorologia confirms consistent rainfall across key Arabica regions. In February, Marília recorded 154.5 mm of rain, while higher accumulations were observed in Mogiana Paulista, Cerrado Mineiro, and Southern Minas Gerais. These conditions have positively influenced flowering consolidation and grain filling.

However, rainfall patterns were uneven across regions. In northern Espírito Santo, particularly in Linhares, excessive precipitation in January totaling 370.6 mm may have negatively affected some fields and increased disease pressure. February rainfall there dropped sharply to just 13 mm. In Robusta producing areas, where harvesting can begin as early as April, rainfall volumes have declined compared to January levels.

Ferraresso emphasized that January was especially critical for grain formation and plant strength. Field observations indicate that consistent rains helped finalize grain filling in Arabica crops. At this stage, cooler temperatures and declining rainfall tend to slow plant metabolism and reduce the risk of severe climatic stress. According to him, any late stress would likely impact the 2027 crop more than the current 2026 harvest, which is shaping up to be stronger than last year’s output.

Despite the overall positive outlook, specialists warn that excess soil moisture increases the risk of diseases such as rust, mildew, and cercospora, requiring careful crop management.

During a podcast hosted by the Fundação Procafé, agronomist Alysson Fagundes highlighted that concentrated rainfall from December through early February may have caused nutrient leaching, particularly boron and potassium. He advised producers to conduct leaf analyses and apply final corrective fertilization carefully, avoiding excesses before transitioning toward harvest preparations.

A bulletin from the Escritório Carvalhaes reinforced that if favorable weather persists, Brazil could harvest a larger crop than in 2025. While the rains are supporting fruit development and reducing premature fruit drop during ripening, they will not generate new fruit or recover earlier production losses from flower and fruit abortion.

Futures Performance

Arabica (KC) Futures

Arabica also declined across the curve, with the most pronounced weakness in the mid-curve contracts (May through September). The move suggests broad selling rather than isolated front-month pressure.

If you want, we can now calculate percentage moves or analyze curve flattening between the two sessions.

Robusta (RC)

The entire Robusta curve moved lower, with the sharpest decline in the nearby March contract. The selling pressure was slightly stronger in the front months, indicating short-term liquidation rather than deep structural curve weakness.

Contango vs. Backwardation

Based on the 26 February 2026 settlement prices, both the Robusta and Arabica futures curves remain in clear backwardation. In Robusta, the March 2026 contract closed at 3,680, while deferred contracts steadily decline to 3,272 by September 2027. The spread between the nearby March 2026 and September 2027 contracts stands at 408 points, confirming a firmly downward-sloping curve. This structure indicates that the market continues to place a premium on nearby supply, reflecting tighter short-term availability relative to expectations for improved production in future seasons.

Arabica shows the same structural pattern. The March 2026 contract settled at 285.60 cents per pound, with prices gradually decreasing along the curve to 247.95 cents by March 2028. The March 2026 to March 2028 spread of 37.65 cents reinforces the presence of backwardation. Despite recent price declines and forecasts of stronger global production, the market is still valuing immediate supply more highly than forward deliveries. This suggests that while participants expect balance sheets to improve over time, near-term tightness has not fully dissipated.

Arabica/Robusta spread

May contracts

Arabica $6,204 1MT
Robusta $3,640 1MT

Spread 41.32%

Volume & Open Interest

Arabica futures trading activity has slowed noticeably over the past several sessions. Earlier in February, daily volumes were elevated, exceeding 80,000 contracts, but participation has steadily declined into the final week of the period. Volume fell from 32,936 contracts on February 20 to 18,801 contracts on February 26, marking a clear contraction in short-term speculative activity. Open interest, however, remained relatively stable through February 25, rising gradually from 160,947 to 164,893 contracts before the February 26 figure was reported as zero, likely reflecting a reporting delay rather than an actual collapse in positioning. The combination of falling volume and steady open interest suggests consolidation rather than aggressive liquidation. Market participants appear to be holding core positions while reducing short-term trading intensity.

Robusta futures show a similar cooling pattern, though with slightly more evidence of position trimming. Volume peaked mid-month near 30,000 contracts and declined steadily to 12,828 contracts by February 26. Open interest reached a high of 91,273 contracts on February 16 and has since eased back toward the low 80,000 range. This gradual reduction in open interest alongside declining volume indicates mild long liquidation or position adjustment rather than new bearish build-up. Participation is thinning, particularly in the nearby contracts, reflecting reduced momentum following the recent price correction.

Certified Inventory Stocks

Arabica

Robusta

Brazil Export Flow

Brazil – Customs Clearance Units (60-kg bags)

This shows how much coffee has been approved and prepared for export. It reflects intent to ship and pipeline buildup, not physical exports yet.

(60-kg bags, as of 26 Feb)

Brazil – Issuance of Certificates of Origin (60-kg bags)

This shows how much coffee has actually cleared Brazilian customs and is therefore ready to leave the country. This is real, executable export flow.

60-kg bags, as of 26 Feb)

If you notice any discrepancies in these figures or have extra information, please email hello@cocoaintel.com or leave a comment – corrections and additional insights are always welcome.