Arabica Coffee Surges on Dollar Weakness and Tight ICE Inventories

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Arabica coffee prices surged to a one-week high on Friday, with September arabica closing up 13.90 cents, or 4.32%, driven by a weaker dollar and tightening exchange inventories. The dollar index fell to a seven-week low, boosting dollar-denominated commodities, while ICE-monitored arabica inventories dropped to a 2.5-year low of 244,172 bags. In contrast, robusta coffee edged lower as ICE robusta inventories rose to a 4.5-month high of 4,261 lots. The slow pace of Brazil's coffee harvest also supported arabica, with Cooxupe co-op reporting harvest completion at 67.3% as of July 31, behind last year's 74.2%. Meanwhile, the USDA's latest biannual forecast projected a record global coffee output of 189.7 million bags for the 2026-27 season, up 6.0% year-on-year, though concerns persist that a strong El Niño could damage Brazil's next crop.

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