Two competing forces
The market is currently navigating two opposing arguments. On one side, differentials for most coffee origins have risen to seasonally elevated levels, reflecting a degree of pushback from roasters who appear to be holding back purchases as futures moved below $3/lb. On the other, certified stocks have continued to flow in for grading against the March contract, signalling that the nearby supply situation for Arabica has improved considerably since Q4 2025.
Middle East conflict introduces additional volatility
The joint U.S. and Israeli military strikes on Iran have introduced an additional source of market volatility. The current logistical impact affects East Africa to Europe trade routes, which are relevant to coffee flows. Additional passive money flows may also enter the commodity complex as a spillover from energy markets. The analysis notes, however, that metals and energy are the more direct beneficiaries of escalating conflict, while softer commodities such as coffee are less likely to see strong demand as a result.
Near-term view
Despite muted signals, the analysis points to a likely modest recovery toward 290 US cents/lb ($2.90/lb) by the end of the week. This reflects a view that the current competing forces leave the market roughly balanced, with a slight lean toward the upside in the near term.