Arabica coffee futures posted strong gains this week, with the September contract rallying 14.9 cents to close at 301.35 US cents per pound, as traders weighed potential supply disruptions from both trade policy and weather concerns.
Tariff threats drive market sentiment higher
The rally brought prices into the key resistance zone between $3.00 and $3.05 per pound that market analysts had been watching closely. The primary driver continues to be uncertainty surrounding the looming 50% tariff on Brazilian coffee exports to the United States, which is scheduled to take effect on August 1st.
Weather models hint at potential Brazilian cold snap
Adding to supply-side concerns, weather forecast models have begun showing the possibility of cold temperatures in Brazil during the final days of July and early August. While these 11-15 day forecasts are typically the least reliable, any hint of weather threats in the world’s largest coffee-producing region tends to create market volatility.
Current models suggest the immediate risk of damaging cold weather has diminished, but meteorological patterns can shift quickly, keeping weather-related supply concerns on traders’ radar as Brazil moves through its sensitive winter period.
Market correction expected ahead
Despite this week’s strong performance, analysts anticipate a near-term pullback in coffee prices as the market digests recent gains. Expectations point to futures retreating to the $2.90-$2.85 range in the coming sessions.
This analysis reflects timely market conditions in the global coffee trade. For up to date prices and analyses visit the Vesper platform: https://app.vespertool.com/market-analysis.