July arabica coffee (KCN25) today is down -3.80 (-1.01%), and July ICE robusta coffee (RMN25) is down -57 (-1.15%).

Coffee prices today are under pressure on the outlook for larger global supplies.  On Monday, the USDA's Foreign Agriculture Service (FAS) forecast that Brazil's 2025/26 coffee production will climb +0.5% y/y to 65 million bags and that Vietnam's 2025/26 coffee output will climb +6.9% y/y to 31 million bags.  Brazil is the world's largest producer of arabica coffee, and Vietnam is the world's largest producer of robusta coffee.

An increase in ICE coffee inventories is also bearish for coffee prices.  ICE-monitored robusta coffee inventories rose to an 8-month high today of 5,211 lots.  Also, ICE-monitored arabica coffee inventories rose to a 3-1/4 month high Monday of 858,534 bags.

Signs of bigger coffee supplies are also weighing on coffee prices after Safras Mercado last Friday reported that Brazil's 2024/25 coffee sales were 97% completed as of May 13, faster than 94% from the same time last year.  

Losses in coffee prices are limited due to concern that poor weather in Brazil will lead to a smaller coffee crop.  Somar Meteorologia reported Monday that Brazil's biggest arabica coffee growing area of Minas Gerais, received 2.5 mm of rain in the week ended May 17, or 12% of the historical average.  

Signs of smaller coffee exports from Brazil are supportive of prices.  Last Monday, Cecafe reported that Brazil's April green coffee exports fell -28% y/y to 3.05 million bags, and Jan-Apr coffee exports fell -15.5% y/y to 13.186 million bags.

Last Thursday, arabica coffee fell to a 3-week low on signs of larger global coffee supplies.  On May 9, the USDA forecast 2025/26 coffee production in Honduras, Central America's largest coffee producer, would climb +5.1% y/y to 5.8 million bags.  Also, consulting firm Safras & Mercado raised its Brazil 2025/26 coffee production estimate to 65.51 million bags from an earlier estimate of 62.45 million bags.  In addition, Conab, Brazil's crop forecasting agency, raised its Brazil 2025 coffee production estimate to 55.7 million bags from a January estimate of 51.81 million bags.

Demand concerns are bearish for coffee prices.  Several global commodity importers, including Starbucks, Hershey, and Mondelez International, recently said the US's baseline 10% tariff on imports would raise prices and further pressure sales volumes.

Robusta coffee has support from reduced robusta production.  Due to drought, Vietnam's coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years.  Also, Vietnam's General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT.  Last Tuesday, Vietnam's National Statistics Office reported that Vietnam's 2025 Jan-Apr coffee exports are down -9.8% y/y to 663,000 MT.  In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags.   Conversely, Rabobank predicted that Brazil's 2025/26 robusta coffee crop would climb +7.3% y/y to a record 24.7 million bags.

The USDA's biannual report on December 18 was mixed for coffee prices.  The USDA's Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags.  The USDA's FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24.  Separately, the USDA's FAS on November 22 projected Brazil's 2024/25 coffee production at 66.4 MMT, below its previous forecast of 69.9 MMT.  The USDA's FAS projects Brazil's coffee inventories at 1.2 million bags at the end of the 2024/25 season in June, down -26% y/y.

For the 2025/26 marketing year, Volcafe on December 17 cut its 2025/26 Brazil arabica coffee production estimate to 34.4 million bags, down by about 11 million bags from a September estimate after a crop tour revealed the severity of an extended drought in Brazil.  Volcafe projects a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.