September 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.

Live Market Data

Coffee Market Report 29/09/2025

This report covers the period from Monday 22nd September to Friday 26th September and was written by Henry Clifford.

Coffee Market 

Another week of dramatic swings in KCZ25, though this time the story was one of recovery rather than collapse. After the previous week’s brutal selloff, the market showed its characteristic volatility with sharp moves in both directions, ultimately ending the week on a positive note. 

KCZ25 opened Monday at 381.80 c/lb, reached a weekly high of 384.00 c/lb, touched a low of 349.45 c/lb during the early-week selling, and recovered to close Friday at 378.05 c/lb. The weekly range of 34.55 c/lb underscores the continued volatility, though the market managed to close just 3.75 c/lb lower than where it began. 

The week began with continued pressure from the previous week’s liquidation, with KCZ25 facing significant selling early in the sessions. The market hit 1-month lows as the previous week’s technical breakdown continued to weigh on sentiment, with the absence of commercial buying that characterised the prior week’s collapse seeming to persist. 

However, the narrative shifted dramatically by Thursday and Friday. Thursday saw KCZ25 close up 3.60 c/lb as tight coffee inventories began to provide some fundamental support. This momentum accelerated into Friday, when KCZ25 posted a strong recovery, closing up 6.70 c/lb as coffee prices settled sharply higher due to tighter inventories at the ICE exchange. 

The catalyst for the late-week rally appears to have been shrinking ICE inventories, which provided the fundamental support that had been lacking during the previous week’s technical selloff. Additionally, excessive dryness in Brazil’s coffee-growing regions sparked renewed crop concerns ahead of the critical flowering season, adding another supportive element. 

What’s particularly notable is how quickly sentiment can shift in this market. The same KCZ25 contract that was hitting 1-month lows earlier in the week managed to post significant gains by Friday’s close, illustrating just how thin liquidity remains and how vulnerable the market is to any shift in commercial interest or fundamental developments. 

The week reinforced that while fundamental supply concerns remain valid, the futures market continues to be driven more by positioning and liquidity dynamics than by traditional supply and demand factors. When physical buyers step away, even modest selling can create outsized moves, but when they return, the recovery can be equally dramatic. 

Origin

The tariff situation continues to create structural challenges for trade flows. American buyers remain cautious about new Brazilian contracts due to the ongoing 50% tariff threat, with reports suggesting that these tariffs have led to a sharp drawdown in US coffee inventories as importers struggle to secure alternative supplies. 

Brazil’s weather patterns continue to be closely monitored as the country moves through the critical flowering period for the 2026 crop. Excessive dryness in Brazil’s coffee-growing regions has sparked crop concerns ahead of the critical flowering season, with the lack of adequate moisture raising questions about proper flower development. 

Beyond the immediate supply concerns, we’re observing significant behavioural shifts among producers that could have longer-term implications for the market. Cooperative structures, long the backbone of coffee marketing in many origins, are experiencing notable changes in how members engage with their organisations. 

Lower volumes are flowing through traditional cooperative channels as some producers bypass their organisations in pursuit of faster payments or marginally higher prices elsewhere. The current elevated commercial price levels have also reduced incentives for differentiated coffees, with producers questioning whether the complex post-harvest processes required for speciality profiles are worth the effort when commercial grades are commanding such strong prices. 

These shifts may impact the diversity of coffee profiles reaching the market this season, as the motivation to invest in quality differentiation weakens when base prices are so attractive. It’s a reminder that sustained high prices can create their own market distortions, potentially affecting the very quality premiums that many origins depend upon for their competitive advantage. 

COT & Certified Stocks

↓ Non-Commercials reduced their Net Long position by 2,935 lots to 22,730 lots Net Long during the reporting period (as of Tuesday, September 24th cut-off). 

↓ Commercials reduced their Net Short position by 7,551 lots to 63,083 lots Net Short. 

↓ Arabica Certified Stock levels fell to 576,753 bags on Friday September 26th, down 77,472 bags from 654,225 bags on Friday September 19th. 

The significant drawdown in certified stocks provides fundamental support for prices despite the reduction in speculative length. The Commercials’ reduction in net short positions suggests some covering activity, while the continued tightness in physical inventories reinforces the underlying supply concerns that have characterised this market. 

Currency & Macro Outlook 

The Dollar had a relatively stable week as markets continued to digest the Fed’s recent rate cut and assess the path ahead for monetary policy. The Fed cut rates by 25 bps in September 2025. Two cuts are expected through end-2025. For 2026, the median Fed Funds rate is projected around 3.25-3.50%. 

Interest Rate Divergence Softening: Yield spreads between U.S. and Europe have narrowed, which has provided some support for European currencies against the Dollar. This narrowing of yield differentials continues to be a key theme for coffee importers monitoring exchange rate developments.

Sterling continues to trade in a relatively narrow range, with UK-specific factors taking a backseat to broader Dollar dynamics. The Pound has managed to hold its ground despite ongoing fiscal uncertainties, suggesting that the worst of the gilt market concerns from earlier in the month may have been priced in. 

For coffee importers, the current environment presents a mixed picture. While coffee prices showed some recovery by Friday, the Dollar’s resilience means that currency headwinds persist for non-US buyers. The narrowing of interest rate differentials provides some hope for relief, but any significant currency moves will likely depend on broader central bank policy divergence. 

Coffee Market Report 22/09/2025

This report covers the period from Monday 15th September to Friday 19th September and was written by Henry Clifford.

Coffee Market

What a dramatic turnaround from recent weeks! The coffee market delivered its most significant bearish performance in months, but this decline had less to do with fundamentals and more to do with market structure. The week illustrated what happens when speculative long liquidation meets an absence of commercial buying interest. 

KCZ25 opened Monday at 396.65 c/lb and surged to a high of 421.25 c/lb, closing at 417.65 c/lb-the daily range was 25.25 c/lb and these ranges are becoming less surprising the more they happen! This bullish momentum was not to last however. 

Tuesday marked the beginning of sizeable selling pressure that would define the rest of the week. On Wednesday, the market opened at 407 c/lb, crashed to a low of 372 c/lb, and managed to close at 375.65 c/lb. This single-session decline was the biggest drop since the 40-cent fall back in June 1997 – a sobering reminder of how quickly sentiment can shift when liquidity evaporates. 

Friday brought no respite, with the market closing at 366.50 c/lb, representing a weekly decline of 30.15 c/lb from Monday’s opening level. This marked the end of a week where upside momentum slowed, triggering massive speculative and algorithmic selling into a vacuum of commercial buying. 

The lack of meaningful commercial activity could not absorb the speculative unwinding. When the physical market disappears from the trading equation, futures markets become dangerously one-sided, and that’s exactly what we witnessed this week. 

Origin

The ongoing tariff situation contributed to market uncertainty. American buyers are delaying or reducing new contracts for purchases of Brazilian coffee beans due to the 50% tariffs imposed on US imports, creating genuine disruption in traditional trade flows.  

The Association of Coffee Exporters of Honduras (ADECAFEH) has revised their forecast for the 2025-2026 crop. “This year’s price levels on the New York Exchange have positively benefited coffee producers, allowing them to reinvest in their farms and better prepare for the upcoming harvest,” said Miguel Pon, President of ADECAFEH in an interview. 

Their official forecast is now at 5.2 million 60-kg bags, representing an 11% increase over the crop they are currently closing. They expect demand to increase from the US given the tariffs situation and we may see differentials firm up as a result. 

COT & Certified Stocks

↑ Non-Commercials increased their Net Long Position by 3,126 lots to total 25,665 lots Net Long. 

↑ Commercials increased their Net Short Position by 5,870 lots to total 70,634 lots Net Short. 

Currency and macro outlook

The week was dominated by the Federal Reserve’s long-anticipated rate cut decision. The Federal Reserve finally delivered a 25 basis point rate cut in September and signalled more easing into 2025, with Fed officials’ projections now leaning toward three cuts next year. However, the Dollar’s reaction wasn’t what many expected. 

The USD rallied after the Fed cut, suggesting that markets had already priced in the move and were focusing more on the Fed’s cautious tone regarding future cuts.  

Sterling had a relatively quiet week, with the focus firmly on US monetary policy. The Pound managed to hold its ground despite the Dollar’s post-Fed strength, suggesting that UK fiscal concerns from previous weeks may be stabilising. 

The EUR/USD also remained range-bound, with the ECB’s Christine Lagarde starting to sound less dovish, saying that the disinflationary process was over, providing some support for the single currency against a stronger Dollar. 

For coffee importers, the Dollar’s post-Fed strength represents a return to the challenging conditions of earlier in the year. However, with coffee prices down significantly this week, the currency headwinds may be partially offset by lower commodity costs – at least temporarily. 

Coffee Market Report 08/09/2025

This report covers the period from Monday 8th September to Friday 12th September and was written by Phil Searle.

Coffee Market

NY Arabica futures surged by over 10 cents per pound on both Monday and Friday, approaching the psychologically pivotal 400-cent threshold. By the end of the week, prices had climbed to a four-and-a-half-month high, settling nearly 6% higher at 396.85 c/lb. Price has now rebounded nearly 120 cents from the June lows of 275c/lb, once again challenging the 400-410c/lb resistance zone  –  a level that has repeatedly capped upwards momentum.

Hopefully, the industry is in a better position to navigate this latest test of the 400 c/lb threshold. Nonetheless, financial pressures continue to intensify across cooperatives, traders, and roasters, adding strain to an already fragile operating environment.

Origin

With no fresh developments on the tariff front, pressure is mounting across the supply chain. Many participants are finding it increasingly difficult to delay fixation, while some counterparties are actively seeking to offload U.S.-bound contracts. The broader industry remains cautious in its approach to physical trading, with heightened anticipation surrounding the onset of the rainy season. Vessel rollovers have become a frequent occurrence, adding further complexity to logistics.

Severe weather disruptions continue across Indonesia, with floods and landslides impacting multiple districts in Bali and Flores. The Arabica harvest in Bali, Java and Sulawesi is largely complete. Sumatra’s main Arabica season is set for the coming weeks.

India’s southwest monsoon is drawing to a close, yet rainfall persists across key growing regions such as Karnataka and Kerala, with thunderstorms expected through the week. Concerns are mounting over the impact of continued precipitation on crop development and overall production outlook. Arabica crop is expected to begin in December and Robusta following in January.

COT & Certified Stocks

↑ Non-commercials reduced their short position by 795 for a total of 12,729 lots short and increased their long position by 2,297 for a total of 35,268 lots long. Net long position of 22,539.

↑ Commercials increased their short position by 5.908 for a total of 119,545 lots short and increased their long position by 2,815 for a total of 54,781 lots long. Net short position of 64,764.

Currency and Macro Outlook

The DXY was pulled between conflicting forces last week—elevated inflation data tempered expectations for aggressive easing, while mounting concerns over economic growth kept pressure on the Fed to act. By Friday, the Dollar had softened as markets leaned more heavily into expectations for a September rate cut.

Sterling, meanwhile, enjoyed a clearer trajectory, buoyed by post-CPI Dollar weakness. GBP/USD rebounded as mixed U.S. inflation figures reinforced the case for Fed easing, allowing the

Coffee Market Report 08/09/2025

This report covers the period from Monday 1st September to Friday 5th September and was written by Henry Clifford.

Coffee Market

The coffee market had a more measured week compared to the dramatic swings we’ve grown accustomed to recently, though fundamental developments from Brazil continued to drive the narrative. While daily trading ranges were more contained than previous weeks, the market still showed its sensitivity to supply-side news, with Brazil’s crop revision serving as the week’s primary catalyst. 

The week started on a bearish note, with Arabica coffee futures falling on Tuesday, slipping further from last week’s 3.5 month high. The market was overbought after a strong run-up in prices during August and there was significant selling pressure as Arabica settled down 6.75 c/lb, at 370.35 us c/lb.  

However, the narrative changed mid-week when Brazil’s government crop forecasting agency delivered news that provided support to the market. Conab, Brazil’s crop forecasting agency, cut its Brazil 2025 arabica coffee crop estimate by 4.9% to 35.2 million bags from a May forecast. This substantial downward revision provided the fundamental support needed to lift prices from their Tuesday lows. 

By Thursday, coffee had recovered to 374.40 us c/lb, up nearly 3 c/lb over the course of the day. The market continued to show sensitivity to any supply-related news from Brazil, underscoring just how tight the global Arabica balance remains. 

From a technical perspective, the market appears to be in a consolidation phase after its strong August rally, with more measured daily movements compared to the dramatic swings of previous weeks. While players remain uncertain whether the bull run has more legs, the week’s trading suggested a market taking stock rather than racing ahead. 

Friday brought a close to an otherwise eventful week. Arabica closed the week 3.45 c/lb lower than how it started at 373.65. The same cannot be said for Robusta, it was open on Monday and the bearish sentiment that kicked off the week continued till Friday’s close, ending 491 $/mt lower at 4,309 $/mt.  

Origin

Brazil dominated the headlines this week, and not in a way the market was hoping for. The agency slightly lowered its forecast for the 2025 coffee crop in Brazil, whose harvest is nearly complete; the downward revision caught many off guard, particularly given the earlier optimism surrounding this crop. 

The Arabica portion of the crop took an even bigger hit, with a 4.9% cut to 35.2 million bags, representing a significant shortfall from earlier expectations. This revision comes at a critical time as the market continues to grapple with the reality of multiple consecutive years of global deficits. 

The other major storyline this week was the ongoing tariff situation, which continues to cast a shadow over global coffee trade flows. Dealers said the market could correct sharply if the U.S. Supreme Court upholds last month’s ruling by a federal appeals court that Trump overstepped his authority in enacting sweeping tariffs. The 50% tariff on Brazilian coffee imports remains a significant overhang, with 16.7% of Brazil’s coffee exports going to the US now under threat. 

This tariff uncertainty is creating additional volatility beyond the fundamental supply concerns. Brazilian officials are reportedly considering legal challenges to the tariffs, while the Brazilian Finance Minister has questioned the reliability of the US dollar as a global reserve currency. Coffee advocacy groups continue to urge industry leaders to press Washington to exempt coffee from new tariffs, warning the policy would raise retail prices and harm farmers, given that less than 1% of coffee consumed in the US is grown domestically. 

Looking at the broader Central and South American picture, the focus remains on how other origins might fill potential Brazilian shortfalls. However, with many regions having already sold significant portions of their crops at lower price levels, the ability to compensate for Brazilian reductions remains limited. 

Weather patterns in Brazil continue to be closely watched, particularly as we move into the critical flowering period for next year’s crop. Any adverse conditions during this sensitive phase could compound current supply concerns and provide additional upward pressure on prices. 

COT & Certified Stocks

As of the latest data (cut-off Tuesday 2nd September), the market positioning remains skewed toward the long side, with speculators maintaining a net long position. According to CFTC data, the Non-Commercials hold a Net Long of 19,447 Lots, reflecting the continued speculative interest in the commodity’s bull run. 

Certified stocks remain relatively low by historical standards, providing ongoing support for the backwardation structure that continues to characterise the forward curve. This tight stock situation means the market remains vulnerable to any additional supply disruptions or delays. 

↑ Commercials increased their net short by 2,971 lots

↑ Futures and Options Open Interest increased by 12,024 lots to total 218,829 lots

Currency and macro outlook

The Dollar’s declining trajectory has provided some relief for international coffee buyers, particularly in Europe where the Euro has shown strength; the EUR/USD exchange rate rose to 1.174 on Monday. This represents a meaningful improvement for European roasters who have been battling the dual headwinds of high coffee prices and unfavourable exchange rates. 

From a broader perspective, Markets are now placing 87–88% probability on a 25 bps rate cut by the Fed in September, with the chance of deeper easing depending on upcoming labour data. This dovish shift in Fed expectations has been a key driver of Dollar weakness and could continue to provide tailwinds for commodity prices if it persists. 

Sterling showed resilience this week, but not for the right reasons. It opened at 1.351 and then fell sharply on Tuesday to hit 1.339. This was down to UK political and fiscal concerns: a sharp climb in bond yields and rising borrowing costs driven by pricier Gilts meant that the UK 30-year bond yield hit its highest level since 1998. 

The Pound recovered to finish the week at 1.351 as weak US employment data helped divert some pressure.