Coffee futures on the most active December contract gained 23.75 cents Monday to Monday to finish at $3.4165 per pound, with a single 5.72% session doing most of the work. That took prices to a high of 342.55, a level not seen since the record 11.6% rally on 9 July. Sucafina had expected the opposite, calling for a drift below $3.10 as the front month spread lost its grip on December. The low for the week was 315.
What is driving this is not a shortage of coffee. Sucafina notes the market broadly agrees Arabica is in surplus this season. The concern is exchange inventory. ICE certified stocks stand at 226,242 bags, within reach of the lows set in November 2023, and a break below that would put them at their weakest since 1999. On its own that would not matter much. The complication is timing: the EU deforestation regulation starts in January 2027 and adds an administrative burden to certifying new Brazilian stock in Europe, so anyone planning to rebuild certified inventory against December has only a few months left to buy and ship it.
The unresolved question is where the coffee already bought is actually going. With the 26/27 harvest nearing completion, plenty has traded at or below levels that would make tendering to the exchange worthwhile. Whether those lots head to the exchange or to roasters under existing commitments is the whole argument, and it is what keeps the fear alive that certified stocks will not be rebuilt before December expiry.
Sucafina is unconvinced. Its view is that coffee is leaving Brazil in greater volumes and that the 26/27 surplus is more than enough to cover global Arabica demand at current price levels. There is a second pressure point too. Even a lot that cannot be certified for ICE can still be hedged, so farmers selling futures against their crop adds weight to the market as commercialisation runs its course.
That leaves a market trading on a stock number while the supply picture points elsewhere. Sucafina is holding the same call it made a week earlier, and it is a specific one.
