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MILAN – Arabica coffee futures have rebounded strongly at the start of this week. Between Monday 10 and Tuesday 11 November, the contract for December delivery in New York gained 3.7%, to settle at 422.70 cents yesterday. The contract for March 2026 delivery, which currently accounts for the majority of trading activity, was also up by 3.5%, closing yesterday at 399.30 cents. London bucked the trend, closing marginally lower for two consecutive sessions and ending yesterday at $4,618, compared to $4,648 last Friday.
ICE Arabica continues to be affected by the very low level of certified stocks, which fell further yesterday to 406,129 bags.
Since the end of July, certified stocks have fallen by more than 360,000 bags. The New York market was also affected by the revaluation of the Brazilian real, which yesterday climbed to a 17-month against the dollar.
A strong real discourages export sales from Brazilian coffee producers. Market participants continue to closely monitor weather conditions in the main coffee producing countries.
Typhoon Kalmaegi did not cause significant damage in Vietnam, which contributed to a fall in Robusta prices.
The situation in Brazil remains uncertain. Until mid-October, most of the producing regions experienced dry weather, which caused some concern. However, the rainfall that occurred in the second half of October and early November has rekindled hopes for the 2026/27 harvest.
According to the analysts, most Arabica-producing regions have received significant rainfall in recent weeks, leading to new flowering in late October and helping the development of the trees.
“At first glance, it is very likely that Arabica production will recover this cycle, but it is still too early to assess the size of the harvest,” said Laleska Moda, a Market Intelligence Analyst at Hedgepoint Global Markets, quoted by Notícias Agrícolas.
Meanwhile, the case regarding the legitimacy of the International Emergency Economic Powers Act (IEEPA) tariffs adopted by Trump has reached the Supreme Court.
Three conservative justices on the nine-judge panel appeared skeptical during the hearing on 5 November, leading most market participants to believe that most tariffs would be reversed by the court’s ruling.
According to Sucafina’s market report, the upside for coffee is that all tariffs would in that case disappear overnight from the ruling and that likely the government will have to pay back all of the collected tariffs as well.
However, the downside here is that the Trump administration must now pivot its stance on “making deals” with other countries, making it less likely to give concessions to specific countries like Brazil, to then have all tariffs become overturned by the Supreme Court.
Therefore, the market is now stuck waiting until the Supreme Court makes a decision on IEEPA, which, given the prioritized nature of the case, should be sometime this year, concludes the report.
