ICE Coffee Futures Drop on Technical Weakness, Brazil Drought Uncertainty

Coffee traders faced a volatile Monday as key futures contracts dropped sharply, driven not by demand shocks or supply disruptions—but by a mix of technical indicators and unresolved questions about how Brazil’s ongoing dry spell might affect this year’s harvest.

The July ICE arabica contract lost 5.15 cents (2.9%) to close at $1.7235 per pound, falling below the 100-day moving average of $1.7408. That decline came despite ongoing concerns that Brazil’s prolonged drought could damage crops, but uncertainty over the actual extent of the harm left both speculators and producers selling.

What Dropped and By How Much

On ICE (Intercontinental Exchange):

• July arabica coffee futures: down 5.15 cents (2.9%) to $1.7235 per pound, closing below the 100-day moving average of $1.7408.
• July cocoa (ICE): down 2 dollars (0.07%) to $3,069 per ton, staying just under Friday’s 13-year high of $3,082.
• September cocoa (ICE): up 2 dollars (0.07%) to $3,072 per ton, hitting a 33-month high of $3,080 intraday.
• July London cocoa (LIFFE): unchanged at £1,932 per ton.
• July raw sugar (ICE): down 0.20 cents (1.2%) to $0.1718 per pound.
• August white sugar (LIFFE): down 3.40 dollars (0.7%) to $467.50 per ton.

Why the Sell-Off Happened

Analysts pointed to two main factors behind Monday’s declines:

• Technical Signals: The drop in arabica futures took prices below the 100-day moving average, a key technical threshold that triggered automated selling and discouraged new buying.
• Brazil Drought Uncertainty: While traders remain concerned that dry weather in Brazil—the world’s largest coffee producer—could hurt yields, the lack of clear data on actual crop damage kept many investors cautious, leading to continued selling pressure.

Meanwhile, cocoa and sugar also saw mixed moves as traders took profits after recent gains and responded to ample global supplies.

The Broader Market Context

On the London and New York exchanges:

• July London cocoa held flat at £1,932 per ton.
• July ICE cocoa fell slightly while September cocoa hit a 33-month peak before pulling back.
• Both raw and white sugar futures dropped, with raw sugar losing 1.2% to $0.1718 per pound and white sugar down 0.7% to $467.50 per ton.

The overall tone in commodity markets was one of profit-taking and caution, with traders cashing in on earlier rallies and responding to strong global supplies.

Frequently Asked Questions

Why did ICE arabica coffee futures fall on June 2?

July ICE arabica futures dropped 5.15 cents (2.9%) to $1.7235 per pound mainly due to technical selling after prices fell below the 100-day moving average, and uncertainty about how much Brazil’s ongoing drought might damage the coffee crop. This combination led both speculators and producers to continue selling.

What was the price of July ICE arabica coffee on June 2?

July ICE arabica coffee futures closed at $1.7235 per pound, down 5.15 cents (2.9%) from the previous close.

Did cocoa futures rise or fall on June 2?

July ICE cocoa futures fell 2 dollars (0.07%) to $3,069 per ton, while September ICE cocoa rose 2 dollars (0.07%) to $3,072 per ton, hitting a 33-month high of $3,080 during the session. London cocoa futures were unchanged at £1,932 per ton.

What happened to sugar futures on June 2?

July ICE raw sugar futures fell 0.20 cents (1.2%) to $0.1718 per pound, and August LIFFE white sugar futures dropped 3.40 dollars (0.7%) to $467.50 per ton as traders took profits and responded to ample global supplies.

Why were traders cautious about Brazil’s coffee crop?

Traders are concerned that Brazil’s prolonged drought could harm coffee production, but there is uncertainty about the actual extent of the damage, which has led to caution and continued selling rather than aggressive buying or hedging.

Recommended FrontStreet Beans for Brazilian Coffee Profiles

For a true taste of Brazil’s signature low-acid, nutty, and chocolatey profile, try FrontStreet’s Brazil Queen Manor—a high-elevation Yellow Bourbon offering creamy, peanutty, and toasted bread notes with a clean finish. For espresso lovers, the Black Cocoa Blend features a strong percentage of Brazilian beans alongside Yunnan Arabica, delivering a smooth, sweet, and balanced shot with hints of plum and chocolate. Both beans showcase Brazil’s reliable, versatile cup suited for everything from filter to milk drinks. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.