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MILAN – New estimates for Brazilian production are once again moving the coffee futures markets, with opposite effects on the two terminals. After Monday’s heavy fall (-805 points), the ICE’s contract for July fully recouped its previous losses and settled at 372.75 cents, up 820 points (+2.2%). London only reopened trading yesterday, with the July contract closing partially down (-$20) at $5,257.
The latest Commitment of Traders report from the ICE Robusta has seen the Speculative Managed Money Sector decrease their net long position by 38.70% over the week of trade leading to Tuesday 15th April 2025 to register a new net long position of 8,863 lots.
Arabica coffee futures rallied Tuesday due to strength in the Brazilian real, which rose to a 2-week high against the dollar, discouraging export selling from Brazil’s coffee producers.
However, the main factor affecting the performance of both coffee futures markets was a new estimate on Brazilian production published by Rabobank, which was definitely less optimistic than the one released last week by Safras & Mercado.
In fact, the Dutch bank pegs the Brazilian 2025/26 coffee crop at 62.8 million bags, or 6.8% less than the 2024/25 crop. Rabobank’s experts carried out a field survey in Brazil’s main production areas between February and March.
“The dry weather in 2024 significantly affected flowering and, consequently, Arabica coffee production. However, excellent yields are estimated for Robusta coffee, despite a pessimistic outlook for the state of Rondonia,” Rabobank reported.
“As in February, March saw below-average rainfall (except in Cerrado Mineiro)” says Rabobank in its monthly update. This dry and hot period brought localized impacts in some producing regions, especially in the south of Minas Gerais and Cerrado Mineiro. However, from the second half of March, the rains returned and brought relief to the situation.
In conclusion, Brazil’s coffee output in the 2025/26 cycle would drop 6.4% to 62.8 million 60-kilogram bags, below the 67.1 million bags it forecast in the 2024/25 crop.
Brazil’s Arabica coffee production is expected to decline significantly (-13.6%) to around 38 million bags, Rabobank said, while Robusta output is expected to grow by 7.3% to reach a record 24.7 million bags.
Another estimate comes from Itaú BBA. The financial services provider based in São Paulo, Brazil, expects Brazilian production to be 64.4 million, 3% lower than the 2024/25 crop. The latter figure is more or less in line with StoneX’s estimate published earlier this month, which forecast a crop of 64.5 million.
“We continue to expect a 10% reduction in Arabica production, to 40.9 million bags, and a 12% increase in Robusta, totalling 23.5 million bags,” the bank said.
“Low stocks and limited supply support prices, while conflicts in the Red Sea and US tariff uncertainties add market volatility” writes Rabobank analysing the overall picture. “Arabica prices fell 6% between Liberation Day and the announcement of the 90-day pause, then rose 5% (as of April 16) after the pause was announced. Besides market fundamentals, non-commercial funds have been active in the ICE arabica market, further increasing volatility.”
Meanwhile, the harvesting of conilon coffee has already begun in some areas of Espírito Santo and Bahia, according to the Cooabriel cooperative.
Itaú BBA sees good signs in the long-term weather models, which predict more rain. This could cause problems during the harvest, but it would also avoid a repeat of last year’s long drought, creating more favourable conditions for the development of the 2026/27 harvest.
Meanwhile, rainfall levels in Vietnam appear to be within the normal range for this time of year. The rainy season is expected to start to pick up towards the end of the month. A good rainfall pattern would favour an upturn in production.
The median estimate for Vietnam’s 2024/25 Robusta output is 26.50 million bags. Early estimates for the upcoming 2025/26 Robusta crop see production at around 28 million bags.
