Arabica Coffee Futures Fall Below $1.90 After Six Weeks

Coffee traders closely watch futures markets for signs of supply shifts and pricing trends—especially when key growing regions like Brazil experience weather changes. On Thursday, a major price movement caught attention: the benchmark March Arabica coffee contract dipped below $1.90 per pound for the first time in six weeks.

The last time March Arabica futures closed below $1.90 was September 25. On November 6, they fell 1.3%, dropping 2.55 cents to $1.88 per pound—the first close under the $1.90 mark in six weeks.

Why Did Arabica Coffee Futures Drop?

The decline was driven by two main factors: weather forecasts for Brazil’s coffee-growing regions and a strengthening U.S. dollar. Forecasts predicted rain in Brazil’s drought-hit coffee areas, which could ease crop stress. This outlook, combined with a firmer dollar, pressured coffee futures, which are priced in dollars and become more expensive for buyers using other currencies when the dollar rises.

The Brazilian real also hit a nearly six-year low of 2.5603 against the dollar, further weighing on prices. A weaker real typically makes it cheaper for Brazilian producers to sell in dollar-denominated markets, potentially increasing supply availability.

What Happened in Other Coffee and Commodity Markets?

Alongside Arabica, other coffee and commodity futures also shifted:

• March ICE Arabica futures: Closed at $1.88 per pound, down 2.55 cents (1.3%).
• January LIFFE Robusta futures: Fell 19 dollars (0.9%) to $2,007 per ton.
• March ICE Sugar futures: Dropped 0.03 cents (0.2%) to 15.48 cents per pound, hitting a five-week low of 15.42 cents earlier.
• December LIFFE White Sugar futures: Rose 0.40 dollars (0.1%) to $415.40 per ton. The more active March contract was nearly flat, edging up 0.20 dollars to $410.50 per ton.
• March ICE Cocoa futures: Gained 1 dollar to $2,871 per ton. December LIFFE Cocoa futures rose 16 pence (0.9%) to £1,894 per ton.

How Weather and Currency Impact Coffee Prices

Brazil is the world’s largest coffee producer, and its climate heavily influences global supply. Rain in drought-affected regions can relieve stress on coffee trees, potentially improving yields. At the same time, a stronger U.S. dollar makes dollar-priced commodities like coffee more expensive abroad, reducing demand. These two forces—improved supply prospects and currency-driven demand softness—combined to push futures lower.

The real’s weakness also encourages Brazilian farmers to sell more, adding to potential downward pressure on prices. Together, these factors create a complex interplay that traders must navigate when forecasting coffee market trends.

Frequently Asked Questions

Why did March Arabica coffee futures fall below $1.90?

March Arabica coffee futures fell below $1.90 per pound due to forecasts of rain in Brazil’s coffee-growing regions, which could ease drought stress on crops, and a stronger U.S. dollar that makes dollar-priced commodities more expensive for international buyers. The contract closed at $1.88, down 2.55 cents or 1.3%.

When was the last time Arabica futures closed below $1.90?

The last time March Arabica coffee futures closed below $1.90 per pound was September 25. On November 6, they dropped to $1.88, marking the first close under $1.90 in six weeks.

How did the Brazilian real affect coffee prices?

The Brazilian real hit a nearly six-year low of 2.5603 against the dollar, making it cheaper for Brazilian producers to sell coffee in dollar-denominated markets. This can increase supply availability and contribute to downward pressure on coffee futures prices.

What happened to other coffee and commodity futures on November 6?

Robusta futures fell 0.9% to $2,007 per ton, sugar futures dropped slightly to 15.48 cents per pound, while white sugar and cocoa futures saw small gains. March cocoa futures rose to $2,871 per ton and December London cocoa futures increased to £1,894 per ton.

Why do weather forecasts influence coffee futures?

Weather forecasts, especially for major producing countries like Brazil, impact expectations for coffee crop yields. Predicted rain can relieve drought stress, potentially boosting production and easing supply concerns, which tends to lower futures prices.

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