Arabica coffee hits one-month high as ICE stocks stay near multi-decade lows

what happened

Arabica coffee futures on ICE climbed to a one-month high on Friday as traders worried that critically low exchange stocks would not be rebuilt as quickly as expected. The contract settled up 10.8 cents, or 3.7%, at $3.056 per pound, after an intraday peak of $3.1130. According to TradingView, ICE-certified stocks stood at 238,976 bags, only slightly above last month's 27-year low of 217,646 bags.

Dealers said supplies from Brazil may not reach ICE warehouses before the December contract expires. Prices also get support from fears that the El Nino weather pattern will cut Brazil's output next year, and from the recent strength of the Brazilian real. Robusta rose $41, or 1.2%, to $3,405 a ton. The harvest in Vietnam is just getting under way, with output expected to be roughly steady compared with last year.

London cocoa fell £134, or 3%, to £4,356 a ton, after a 1.5-month high of £4,640 on Wednesday. New York cocoa dropped $186, or 3.2%, to $5,645. Cocoa grind data in key regions rose 14.3% in the third quarter, more than expected, pointing to demand recovering from the 2025 slump. Raw sugar lost 0.28 cents, or 1.3%, to 20.85 cents per pound, after a 19-month peak of 21.29 cents on Wednesday. Excess El Nino-linked rain in Brazil slowed production and reduced sucrose content in cane.

why it matters

For markets, this is a story about weather risk hitting several soft commodities at once. Brazil's centre-south sugar output fell 6% in the second half of September, to 2.86 million tons, while drought in Europe damaged the beet crop and dryness in India adds to the pressure. Coffee, cocoa and sugar respond to the same climate factors, so their price moves can be linked.

tags

instruments