Weekly Market Report – 05 July 2026

Well, I got it spectacularly wrong last week and should have paid greater heed to what the speculators and managed index funds were doing.  The weather forecasters initially said it would be dry this week in Brazil, but they also got it spectacularly wrong, as heavy rain continued to fall throughout the first half of the week causing serious delays to the harvest but also lowering quality.  Consequently, arabica coffee prices exploded upwards during the first half of the week but retreated a bit on Thursday (New York was closed on Friday for America’s Independence Day), when the forecasters suggested that it would turn dry and the Exchange raised its margin call on front end contracts by 37%.  Nevertheless, arabica coffee prices finished the week gaining 25.25 cents/lb, with the second position (September) closing at 301.20 cents/lb.  The robusta market could not ignore what was going on in New York and duly followed upwards although the gains were more modest and ended the week gaining $160/ton (7.25 cents/lb) at $3,716/ton (September).  In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably between 235 and 240 toea/kg higher than they were last week.

Somar Meteorologia reported on Monday that 31.3 mm of rain fell in Minas Gerais, Brazil’s biggest coffee-growing region in the week ending June 28, this is almost 20 times the historical average. On Thursday, however, the forecasters revised their predictions suggesting that the rainfall would be less than originally thought, although more rain is still expected in South Minas and São Paulo for the week starting July 12th.  New data from the Vietnam Government shows the country exported approximately 21.01 million bags of coffee during the eight months of the 2025/26 coffee year, up 25% over the same period last year.  The new Colombian Government has agreed to extend the FNC’s contract which allows it to oversee and control the coffee industry of Colombia as well as raise funds for the National Coffee Fund.  The FNC is funded primarily through levies on coffee exports, with producers contributing US$0.06/lb on green coffee exports, US$1.08/lb on roasted coffee, US$0.48/lb on soluble coffee, and US$0.36/lb on coffee extract. The  Fund must be used exclusively to support the welfare, sustainability, and competitiveness of the sector.

Once again, I cannot get access to any reliable regularly-published data on price differentials, so I have had to rely on sources which may not be entirely accurate or up to date.  Movements in physical price differentials have been mixed this week.  Brazilian 3/4’s are steady at minus 18, down 4 cents/lb. But Honduras HGs are higher at plus 25, Kenya AB FAQ’s are steady at between plus 55 and plus 60; while Colombian UGQ’s are much higher at plus 65. It therefore seems likely that PNG Y1’s will probably be higher at around plus 11/12, but this is just a guess.  If this is correct, then it should have been possible for an exporter to have fixed on Friday in New York for Sept/Oct delivery at a price somewhere between 311/50 cents/lb and 327.80 cents/lb.   As New York was closed on Friday the next Commitment of Traders report will only be published on Monday, but it will tell an interesting story.  The rain is certainly impacting short term availability, and it is this shortage which is driving the current volatility.  The outlook is therefore very murky but the robusta market fell heavily on Friday as speculators too their profits.  My instinct still tells me that prices might possibly go lower but I have been wrong on that for the last three weeks.       

Source:
Mick Wheeler, UK.

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