Coffee Futures Decline as Brazil Harvest Resumes Despite El Niño Weather Risks

Coffee futures experienced a decline on Monday, June 22, as drier weather in Brazil allowed the coffee harvest to resume after weeks of disruption. Arabica futures fell 0.30 percent and robusta futures fell 1.40 percent. The reopening of the Strait of Hormuz is also expected to exert downward pressure on prices, as lower global shipping rates, insurance costs, fertilizer prices, and fuel costs are anticipated to reduce expenses for coffee importers and roasters.

The pullback followed a sharp reversal the previous Thursday, when coffee prices climbed to five-week highs amidst persistent rain across Brazil's growing regions. This rain had delayed the harvest and raised concerns about bean quality. Conversely, the recent drier spell has now enabled the resumption of harvesting activities.

Exchange-certified stock levels have presented a mixed picture over the past three months. ICE arabica coffee inventories decreased to a 2.25-year low of 393,937 bags on Monday, while ICE robusta inventories rose to a 2.25-month high of 4,032 lots on June 18. This disparity in stock levels, coupled with fluctuating weather conditions, has kept the market on edge throughout the latter half of June.

Future weather risks add another layer of concern for growers and traders. The U.S. National Oceanic and Atmospheric Administration (NOAA) places the probability of a Super El Niño event this year at 67 percent. Such conditions could delay the rains Brazil's coffee trees depend on for flowering between September and October, a critical period that shapes the following season's crop.

On the supply side, the U.S. Department of Agriculture's Foreign Agricultural Service projected on June 3 that Brazil's 2026-27 coffee crop could reach a record 71.9 million bags, an increase of 14 percent year-on-year. This outlook previously pushed arabica futures to a 19-month low. Robusta prices also face separate pressure from Vietnam, the world's largest producer of that variety, with January-May 2026 exports rising 7.9 percent.