Coffee Futures Surge Over 50% This Year

If you’ve been sipping your usual coffee every morning, you might be surprised to learn you’ve been drinking what’s arguably the best-performing financial asset of the year. Coffee futures contracts have surged over 50% in 2024 — and you’re likely paying more without seeing any returns.

In short: coffee futures are up more than 50% year-to-date, fueled largely by a historic drought in Brazil, the world’s largest coffee producer. At the same time, the broader agricultural ETF has climbed nearly 9% since January, reflecting stress across key crop supplies.

Why Coffee Futures Have Jumped Over 50%

The big driver? An unprecedented drought in Brazil, a country that produces more than a third of the world’s coffee. The dry spell, described as the worst in 60 years, has severely damaged coffee crops — particularly arabica — along with soybeans and other key commodities. That supply shock has sent futures prices climbing rapidly through the first half of 2024.

What’s Behind the Agricultural ETF Rebound

Since the start of January, the agricultural ETF — a broad tracker of key farm commodities — has rebounded from a low of 24.4 to 26.6, marking roughly a 9% gain. This recovery follows a long-term downtrend that began after 2010, with the index hitting a cyclical bottom around 2013. The recent surge has been sharp, with the ETF breaking through key technical levels.

Key indicators show strong momentum: the ETF has pierced its 10-day, 20-day, and 50-day exponential moving averages (EMAs) in recent weeks, and both MACD and Chaikin Money Flow (CMF) suggest further upside potential. These technical signals reflect growing investor confidence in continued upward movement for agricultural commodities, including coffee.

How Drought in Brazil Is Shaking Global Coffee Supply

Brazil is the world’s dominant coffee exporter, responsible for a massive share of global arabica production. The ongoing drought — the worst in six decades — has hit coffee-growing regions hard, reducing yield forecasts and tightening global supply. The shortage has been a major factor behind the steep rise in coffee futures, which reflect market expectations of tighter availability and higher future prices.

The drought’s impact isn’t limited to coffee: soybeans and other crops have also been affected, contributing to broader pressure on the agricultural ETF. This combination of weather-driven supply constraints and rising demand has created a perfect storm for commodity price increases.

Frequently Asked Questions

Why have coffee futures gone up so much in 2024?

Coffee futures have risen over 50% in 2024 primarily due to a severe drought in Brazil, the world’s top coffee producer. The dry conditions have significantly reduced coffee yields, especially for arabica, tightening global supply and pushing futures prices higher.

What is an agricultural ETF and why does it matter?

An agricultural ETF tracks the performance of a basket of agricultural commodities, including coffee, soybeans, and grains. The recent 9% rebound in the ETF, from 24.4 to 26.6, reflects improving sentiment and supply concerns — particularly due to Brazil’s drought — across key farming sectors.

How does Brazil’s drought affect global coffee prices?

Brazil produces over a third of the world’s coffee, mostly arabica. The worst drought in 60 years has damaged coffee crops there, reducing supply and contributing to the sharp rise in both physical and futures coffee prices globally.

What technical indicators show strength in the agricultural ETF?

Recent weeks saw the agricultural ETF break above its 10-day, 20-day, and 50-day EMAs. Additionally, MACD and CMF indicators suggest the ETF still has significant upside potential, pointing to continued upward movement in agricultural commodity prices.

Will coffee prices stay high or come back down?

While no one can predict future prices with certainty, the current tight supply — driven by Brazil’s drought and other global factors — suggests coffee prices could remain elevated unless production rebounds significantly in the coming months.

Recommended FrontStreet Beans for Market Watchers

Track coffee market shifts with FrontStreet Coffee’s single origins. Try their Ethiopia Huakui for bright floral and citrus notes, or Yirgacheffe for juicy berry and stone fruit layers — both highlight the delicate profiles affected by origin growing conditions. For deeper complexity, their Brazil Queen Manor offers nutty and chocolatey tones from one of the world’s top arabica regions. All three showcase how terroir translates to cup, especially in volatile market years. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.