May Coffee Market Report

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.

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Coffee Market Report 02/06/2025

This report covers the period from Monday 26th May to Friday 31st May and was written by Tom Haigh.

Coffee Market

Another Bearish week saw KCN25 open at 359.10 cts/lb on Tueday 27th May, following the Memorial Day weekend. The day’s trading saw a temporary upside turn on the previous week’s close, led mainly by a better macro mood and speculation of frost in Paraná, Southern Brazil. A region that produces 1.2-2% of Brazil’s production, if frosts did hit Paraná on Friday around 1 million bags would be at risk. The market reached a high of 364.85 cts during the day’s trading before closing at 355.55 cts.

Certified stocks are steadily building due to weak commercial demand and continued trade uncertainty, putting downward pressure on prices. Commercial activity remained quiet on Tuesday. Are high diffs in Brazil creating buyer hesitancy? The Bearish sentiment continued into Wednesday 28th May, as the market hit lows nearing 350 cts, before closing at 351.95 cts. Conjecture over frosts eased as the week progressed, and Thursday’s market opened just a cent higher than the previous close, before falling to 347.15 cts and closing the day at 348.40 cts.

Coffee availability continues to improve, most notably with Colombia’s exports up by 17.5% on the previous year and Uganda’s exports up by 20.3%. Arabica balance remains tight however, and the cumulation of deficits from 2021 to 2024 looms heavy. Exporters are finding it challenging to get coffee from producers, with the new crop selling pressure also looming. The good news? Robusta production is looking healthy, with indicative surplus levels large enough to soak up any buyers migrating from Arabica.

Friday 30th came and went with no indications of frost in Paraná, capping off the week with yet another downward turn with daily lows nearing the 340s. The day opened at 348.60 cts and closed at 342.45, 16.65 cts down from where it began, and the lowest the market has been in 7 weeks.

COT & certified stocks

↓ Non Commercials reduced their Net Long Position by 1,641 lots to total 32,884 lots Net Long

–  Arabica Certified Stock level: 882,212 bags

↓ 129,821 bags pending grading

Origin

Vietnam’s coffee production for 2025/26 is forecast to increase by ~ 8% to 31 million bags according to the USDA. Farmers are responding to strong prices by investing in crop inputs and expanding cultivation, especially in the Central Highlands. Despite some shifts to other crops, total coffee area continues to grow, supported by seedling demand and replanting programs aimed at yield and quality improvements. Domestic coffee consumption is projected to increase to 4.9 million bags fuelled by economic growth, tourism recovery, and rising popularity of specialty coffee. Vietnam’s coffee retail scene is expanding rapidly with over 500,000 outlets and growing interest in takeaway and home-brew options. At export level, the focus is shifting to higher-value goods including roasted and soluble coffee, particularly to Asian markets. Imports are projected to decline slightly, and stockpiles are tightening as exporters adopt just-in-time strategies due to high prices and market volatility.

A petition spearheaded by Coffee Bros. has amassed over 10,000 signatures, urging the U.S. government to exempt coffee from current tariffs. The initiative highlights the challenges faced by the specialty coffee industry, where small roasters and café owners grapple with escalating costs, supply chain disruptions, and climate-related issues. The petition argues that coffee, being a non-manufacturable agricultural product in the U.S., should not be subjected to tariffs designed for domestic manufacturing protection. Additionally, many essential café supplies, including packaging materials, are sourced internationally, further complicating the industry’s operational landscape. The growing support for the petition underscores the industry’s call for policy adjustments to safeguard small businesses and maintain the quality and affordability of coffee for consumers.

Currency & Macro Outlooks

The USD faced selling pressure at the start of the week, following lingering concerns over Trump’s ‘big, beautiful’ tax and spending bill. This was deepened as US markets were closed for the Memorial Day weekend. The USD gained a little strength throughout the week with the U.S. Dollar Index breaking 100 on 29th May. USD exchange rates also surged following a US federal court ruling that Trump exceeded his authority when imposing blanket tariffs on imports from US trading partners, before dropping off at the tail of the week.

GBP also had a short week, as UK markets were closed for the Bank Holiday. Overall the British Pound Currency Index slid a little through the week, opening at 135.59 and closing at 134.63. A lack of UK economic data leaves GBP in uncertain waters, floating with no clear direction and leaving the Sterling a little exposed. Although the IMF increased the growth forecast for 2025 from 1.1% to 1.2%, it warned of the need for fiscal rule easing to avoid any emergency spending cuts.

Following Trump’s threat to place a 50% tariff on goods from 1st June, the Euro entered the week meekly, however rebounded quickly following Trump’s announcement on Sunday that he would delay the deadline until 9th July. Imminent European tariffs hampered the EUR and the release of Germany’s latest unemployment created a drop in the EUR Index on Wednesday. The latest inflation data for Germany released on Thursday looked favourable, helping the EUR finish the week on a positive note.

Coffee Market Report 27/05/2025

This report covers the period from Monday 19th May to Friday 23rd May and was written by Guus Bremer.

Coffee Market

Last week we started off with a 10 usc/lb (≈ €0.19/kg) daily trading range on Monday closing at 375. This high volatility continued throughout the week, reaching a 5-week low of 355.25¢/lb on Friday before a modest rebound settling at 361 close. The overall trend was bearish, influenced by increasing ICE-monitored inventories.  

Origin

In Brazil the very low altitude regions started with harvesting 7% arabica sofar. No (independent) confirmation of frost risk yet, which could be one of the few left joker cards to pull for the bulls. There’s a decent percentages of larger beans (20-30%, compared to 7-12% same time last year). You would expect this should reduce the extreme premiums of up to 20 c/lb paid for the higher screen 17/18 Santos compared its smaller brother Screen 14-16 (medium to good bean).    

Looking at Robusta, Vietnam is expected to show a significant rebound for its 2025/26 harvest with 8% up to 30 million 60-kg bags (starting November). Add the Brazil Conilon prospect of 24 million bags and it explains the almost $600/mt drop for Robusta futures we have been seeing since the beginning of May. Both countries have had much better weather conditions and of course an expansion of cultivated area on the back of last year’s rallies that supports a rise in production. 

In the Centrals we see slightly rising figures all over for 2025/26 except Costa Rica (10% decline). However, there is a long way to go until new crop, and availabilities until then are either limited, sold out or disrupted (due to financial constraints).  

COT & certified stocks

↓ The open interest decreased by 4,406 lots to 150,118. With a falling market that suggests long liquidations (bulls exiting), are the speculators finally starting to take their profits? (surely not cutting losses?). 

With the still tight supply for nearby coffee in origin, backwardation remains (which discourages rolling of futures). However, the spreads from one month to the next do seem to be reducing.   

↑ Certified stock levels are piling up and rose to an 8-month high Friday of 5,438 lots for Robusta and to a 3-3/4 month high Friday of 886,590 bags for Arabica.   

Currency & Macro outlooks

The ‘sell america’ theme continued with less confidence in U.S. fiscal stability; the approval of President Trump for a $3.8 trillion tax and spending bill did not help. The € (1.118 to 1.136) and GBP (1.328 to 1.354) gained strength as a result.

Coffee Market Report 19/05/2025

This report covers the period from Monday 12th May to Friday 16th May and was written by Jack Ravenscroft.

Coffee Market

Monday 12th May saw KCN25 open at 388cts before plummeting 14.80cts throughout the day, closing just above the daily low of 372.95cts. This strong Monday move set the tone for the bearish week ahead. 

Why? Certified stocks continued to increase fueled by Central American submissions, most notably with coffees from Mexico and Honduras. Calendar spreads tightened further. KCZ25 now offers just a single digit discount on the front month. Positive signals surrounding a trade deal with China gave the USD index continued strength. And it seems a consensus has formed that the 2026 Brazil crop carries ‘tremendous potential’. 

Following a more subdued 3.40cts increase on Tuesday 13th May, Wednesday saw yet another substantial day of downward trading with the market closing out at 364.80cts. An 11.55cts drop from the days’ open and a 23.20cts drop from the weeks’ open.  

Thursday 15th May saw a temporary fightback against the bears as the market closed in the mid-370s. Suggestions that bean development and crop size look better than forecast for the upcoming 2025 harvest are perhaps premature. Any such news is still not reflected in the market with fresh crop diffs holding firm and large screens in Brazil trading at a hefty premium. The first chatter of frost also reared its head, with forecasts of some low temperatures in Parana expected next week. Expect more talk of frost as we move into June and July.  

The market finished the week on Friday close to the Wednesday close at 365.65cts. It is fair to suggest that the sharp downward move could be attributed to the KCK25 option expiration as well as macros and fundamentals. It is normal for positioning to either suppress or amplify volatility before and after expiry. 

Origin

Rain over the last two weeks, with more forecasted throughout the remainder of May, has begun to ease worries of a dry season for Colombia and some Central American coffee-producing countries. Forecasts indicate a slowdown of rain beyond May, so still something to keep an eye on for the upcoming growth season, but June to August forecasts do not look overly dry. 

Cenicafé is actively developing disease-resistant coffee varieties to adapt to recent challenges of changing weather patterns. In December 2024, a new coffee variety called Castillo 2.0 was introduced. Researchers believe this variety will help farmers secure a fair income from their coffee production and better cope with the impacts of climate change. 

According to a recent ICO report, exports of Colombian Milds increased by almost a third in March from the same month of the previous year (24.1%) to reach 1.432 million bags. Overall, Colombian Milds have seen a strong leap forward in the first half of CY 2024/25 (October-March), with an increase of 20.4% from the first half of CY 2023/25 to 8.056 million bags. 

Coffee Value Assessment 

The Specialty Coffee Association (SCA) and the Brazil Specialty Coffee Association (BSCA) announced a strategic partnership on 8th May to make the Coffee Value Assessment the official standard for Brazilian specialty coffee. The partnership with the BSCA comes after a frenzy of attention in the Q Community following SCA’s takeover of the Coffee Quality Institute’s Q System. 

According to the SCA, the new ‘Evolved Q Grader Program’ expands “coffee assessment beyond flavour to highlight the diverse attributes that make specialty coffee unique”. As of October 2025, the SCA will be operating an evolved Q Grader program based on the CVA and CQI will no longer be involved in the Q Grader Program operations. 

The agreement between BSCA and SCA builds on a similar Memorandum of Understanding (MOU) with the National Federation of Coffee Growers of Colombia, making Brazil the second country to incorporate the Coffee Value Assessment into its national evaluation framework. 

COT & certified stocks

↑ Arabic pending grading: 147,536 bags

↑ Arabica Certified Stock level: 851,169 bags

Currency & Macro Outlook 

The US dollar began the week on a strong note, buoyed by the announcement of a 90-day trade truce between the US and China, which includes a mutual reduction of tariffs by 115%. This development was positively received by USD investors, who are optimistic that the easing of tensions may lessen the likelihood of a US recession. The effects of the USD index’s strength in recent weeks are illustrated below.

The GBP maintained its strong performance after the release of better-than-anticipated UK GDP figures. The data revealed that the British economy grew by 0.7% in the first quarter of 2025, an increase from 0.1% in the previous quarter and surpassing expectations of a 0.6% growth. This favorable outlook was further enhanced by optimism surrounding a potential UK-EU trade agreement at the London summit.

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. 

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

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.