Good day. Welcome to DRWakefield’s Weekly Coffee Market Report!
This report touches upon the Arabica and Robusta coffee futures market, currency pairings and news from origin. See our Market Report Terms page for clarity on any terminology in the coffee market report below.
Live Market Data
Coffee Market Report 12/05/2025
This report covers the period from Monday 5th May to Friday 9th May and was written by Priscilla Daniel.
Coffee Market
Monday 5th May opened at 386.05 with a bullish sentiment as it raised up to 394.10 on the higher side.
Coffee futures traded higher on Monday, May 5, during a low-volume session. July Arabica settled above the 20-day moving average at 383.37, after briefly dipping below that level earlier in the day. The New York terminal saw a delayed open due to the London market closure for the May Day bank holiday, which contributed to muted commercial activity throughout the session. Prices extended modest intraday gains but the rally stalled just below key resistance at 394.70, the week’s highest level.
On Tuesday, futures closed lower, led once again by weakness in Arabica, which failed for a fourth consecutive session to break above the 394.70 resistance (basis July). Despite the pullback, prices held firm above the 20-day moving average, which had adjusted to 383.92.
By Thursday, the Arabica market remained largely unchanged, with prices hovering near the 385.00 strike ahead of the June options expiration on Friday, May 9. Support at the 20-day moving average (now at 384.35) remained intact, but upward momentum continued to falter below the 390.00 resistance level.
On Friday, as expected, the market softened in response to the June option expiration, with July Arabica settling at 385.05, marking the lowest close of the week. This was marginally above Monday’s opening level of 386.05, reflecting a tight trading range. The highest intraweek volatility was recorded at 11.90 USC/lb.
COT & certified stocks
↓ Commercials reduced their long position by 270 lots to 41,034 lots
↑ Commercials increased their short position by 1,277 lots to 122,529 lots
↓ The open interest decreased by -1,133 lots to 154,370 and with options decreased by -3,195 lots to 193,741
– Arabica 136,066 bags are pending grading.
Origin
Supply chains across origins have come under strain in recent months, and Brazil is certainly affected. Initial figures from Cecafe state that in February 2025 2.87 million bags of green coffee were exported from Brazil, which is a significant 20.5% lower than the same month in 2024. This is due to lower production, but also to logistical challenges in getting coffee on the water, and persistent supply chain issues where farmers are reluctant to sell their coffee, whilst the price may continue to go up. These issues are causing trouble for the whole industry, and one of the biggest coffee exporters in Brazil, Montesanto Tavares, has recently filed for bankruptcy after unsuccessful attempts to renegotiate R$2.13 billion in debt. However, there is some positive news from Brazil too! The weather forecast is predicting rainy showers for a number of days, which is positive for the crop following the less than ideal hot and dry weather they have had recently.
Coffee Crop Forecast for Guatemala (2024–2025)
USDA Update: USDA revised its forecast upward to 3.53 million bags from the previous 3.42 million bags (Dec estimate). Improvements followed recovery efforts after the 2010 coffee rust outbreak. Ruiz’s contradictory view, CEO of Unex, Coffee Importers:
- Estimates much lower output, around 2.6 million bags.
- Attributes decline to Rising input and labor costs (post-COVID, linked to immigration) and unfavourable weather: El Niño effects led to low rainfall and higher temperatures, hurting mid/low altitude regions (e.g., Santa Rosa, Huehuetenango, San Marcos).
- Notes a decline in productivity since the 2022–2023 crop.
- Expects minimal carryover stocks and confirms reduced crop flow and availability, despite good quality.
There is a discrepancy between the USDA’s optimistic forecast and Ruiz’s more cautious field-based assessment, which indicates lower production due to economic and climatic challenges.
According to the USDA report, India’s 2025/26 coffee production is forecast to decline 2.4% to just over 6 million bags due to adverse weather. Arabica output is expected to fall 3.6% to 1.35 million bags, while robusta may decline 2.1% to 4.7 million bags. Meanwhile, domestic consumption is projected to increase 4.6% to 1.36 million bags, while exports are seen falling 3.6% to 5.99 million bags.
Currency & Macro Outlook
Global coffee markets remain under inflationary pressure, especially at the consumer level. In Brazil, coffee inflation reached nearly 78% year-over-year by March, while in the U.S. it climbed nearly 24%. This has started to affect demand, as reflected in recent earnings. Kraft Heinz reported a 6.4% drop in Q1 2025 net sales, with a 5.6% decline in volume/mix, including coffee. Despite a slight price increase, the company lowered its full-year forecast, now expecting a 1.5–3.5% drop in organic sales and a 5–10% decline in adjusted operating income as of yet, and tried to reassure that despite this, the Fed was “not in a hurry” to cut rates.
DXY
As of May 12, 2025, the U.S. Dollar Index (DXY) stands at 101.65, reflecting a 1.31% increase from the previous session. This uptick is attributed to positive market reactions following the U.S.-China trade agreement, significantly reducing reciprocal tariffs and easing trade tensions. The dollar strengthened against safe-haven currencies like the yen and Swiss franc, supported by improved risk sentiment and expectations of a cautious Federal Reserve approach to rate cut.
Coffee Market Report 06/05/2025
This report covers the period from Monday, 28th April to Friday, 2nd May and was written by Henry Clifford.
Coffee Market
Going to the moon? The previous week’s trading saw the market close nearly 30 c/lb up over the course of the week and the industry was concerned about whether we would see it repeat itself. Although there was a weekly range of 37.15 c/lb (the high on April 29th at 418.90 c/lb and the low on May 2nd at 381.75 c/lb), the week in fact settled 10.50 c/lb down on Monday’s open, closing Friday at 385.40 c/lb. What happened in between? And why are we seeing such volatility?
On Monday the market surged up and this carried into Tuesday but it could not sustain this movement and after we hit the weekly high of 418.90 c/lb, what followed was a downward trend and a notable absence of buying from the physical side of the market.
The market is a fragile place at the moment and nobody is quite sure what represents a ‘fair value’ NYC level: differentials have softened in Central America to compensate for the high market, but it appears there is not much physical left at origin to sell. Brazil differentials remain firm and roasters and importers can only hold out for so long in the hope that differentials might come down. As a result, there is not much industry activity currently and this means a less liquid market. This lack of liquidity is increasing volatility and therefore producing the bigger trading ranges we are observing. The uncertain macroeconomic climate further fuels this volatility and we don’t expect it to dissipate anytime soon.
COT & Certified Stocks
↑ Non-Commercials increased their net long position by 3,953 lots to total Net Long 29,618 lots.
↑ Commercials increased their net short position by 8,887 lots to total Net Short 68,585 lots.
Origin
When Central America sells out of coffee this often accelerates the pace of sales in Peru as roasters look there for options. Last year, this resulted in over-selling in Peru, and this produced defaults, primarily because many companies fixed before they were in possession of the physical and did this before the market rally. Hopefully lessons have been learned regarding fixations but the Peru new crop is in high demand and it will likely sell quicker than the market anticipates once more.
Problems at port persist in Nicaragua, with many shipments going back to January still not on the water. The quickest solution has been to swap to 40ft container bookings, but this is not possible with all warehouses, and sometimes it means coffee that was supposed to ship in bulk now has to ship in bags, as handling a 40ft bulk container is quite a different proposition to handling a 20ft bulk container. Shipments are beginning to regularise, but this has caused financial challenges for exporters.
Currency & Macro Outlook
DXY Weekly Chart
The market remains more susceptible than normal to macroeconomic events and therefore we continue to pay a great deal of attention to Mr. Trump’s policies and what is going on at the Federal Reserve. You could insert a different reason each day on how something negatively or positively impacts the US Dollar due to tariffs or the Trump administration’s position on the Federal Reserve. It seems Trump has cooled off calling for the sacking of Jerome Powell and challenging the Fed’s Independence (for now), but if this resurfaces, the Greenback will come under pressure once more. That said, the Mar-a-Lago Accord wishes to devalue the Dollar so this behaviour might be just a way to achieve this goal. Since the start of the year, GBP/USD has moved from 1.25 to 1.32, and EUR/USD has moved from 1.03 to 1.13 – one wonders what level Trump has in mind that he would be happy with? The US Dollar Index has gone from 109 to 99, levels not seen since 2022.
