Arabica coffee prices continued their upward trajectory for the second consecutive session, reaching new record highs due to ongoing supply concerns and escalating trade tensions. Areas in Brazil, particularly Minas Gerais and Sao Paulo, are anticipating high daytime temperatures, while dry weather conditions are forecasted for Espirito Santo this week. These climatic factors are likely to impact the flowering of coffee plants. Meanwhile, Brazil’s National Supply Company (CONAB) has revised its arabica coffee production estimates downward from 37 million bags to 35.2 million bags, intensifying worries about supply.
In terms of inventories, recent official data reveals that total coffee stocks in ICE-monitored warehouses decreased for the fourth straight session, declining by 766 bags to 669,200 bags as of September 12. This marks the lowest inventory level since May 2024. The drop is primarily attributed to a significant decrease in Brazilian beans, which now account for only 13% of the total inventory compared to 63% at the beginning of the year. Farmers are holding back on selling their beans amid tariff uncertainties and are anticipating higher prices due to lower production forecasts. Additionally, money managers have increased net bullish bets by 4,175 lots for the sixth consecutive week, bringing the total to 36,628 lots—the highest level of bullish bets since May 20, 2025. Since early August, arabica prices have surged over 45%, fueled by dry weather in Brazil, U.S. tariffs on Brazilian coffee, and diminishing inventories.
In a separate development, the European Commission’s latest Mars report indicates that Ukraine’s wheat yield for the 2025 season could drop to 4.16 tons per hectare, a 6.1% decrease year-on-year and lower than the five-year average of 4.22 tons per hectare. This decline is largely blamed on dry weather conditions affecting the Eastern and Southern regions of Ukraine. Conversely, crop yield estimates for corn and soybeans have improved. Corn yield estimates have risen to 7.3 tons per hectare—a notable 11.8% increase year-on-year—while soybean yields are estimated at 2.5 tons per hectare, marking a 4.5% year-on-year rise. These increases are attributed to adequate water supply and the absence of severe heat stress in the Northern and Western areas, despite some delays in crop development.
Meanwhile, the USDA’s latest crop progress report indicates that as of September 14, 67% of the U.S. corn crop is rated in good to excellent condition, which is a slight decrease from 68% reported a week earlier but an improvement over the 65% recorded at the same time last year. Harvesting is proceeding at a normal pace, with 7% of the crop harvested—slightly down from 8% at the same time last year but in line with the five-year average of 7%. The soybean crop also reflects a decrease in quality ratings, with 63% deemed good to excellent, down from 64% the previous week and the same time last year. Harvesting for soybeans is at 5%, down from 6% last year, yet still above the five-year average of 3%. The USDA has also noted that winter wheat plantings reached 11% for the week ending September 14, down from 13% both last year and the five-year average.
