Speculative investment in coffee futures has turned net short for only the second time this year, according to Sucafina. The last move to the short side lasted two weeks, with the market trading around $2.50. Before that, coffee had not held a sustained net short position beyond two weeks since October 2023, when prices were at $1.50 a pound. Positioning of that kind says more about conviction than any single week of price action does.
The price went with it. The most active December contract fell 7.5 cents Monday to Monday to end at 276.4 US cents a pound, against Sucafina’s expectation the week before of a broader commodity rally lifting coffee back into a 285 to 295 range. That rally proved short lived. Rising inflation expectations led the US Federal Reserve to raise interest rates, which strengthened the dollar, and a stronger dollar improves the return for farmers selling in dollars and receiving local currency. Separately, tensions between the US and Iran cooled, setting off a selloff across energy that spilled into coffee.
Origin supply is the part buyers should weigh most carefully. There is still plenty of coffee left to sell and hedge in Brazil, even with producers holding out and waiting for rallies to price against. That is unsold volume sitting above the market rather than behind it.
The weather argument has weakened too. Conditions remain optimal for the flowering of Brazil’s 2027/28 crop, which has calmed expectations of an El Niño driven disaster. Sucafina expects prices to edge lower toward the bottom of the 270 to 280 trading range by the end of this week.
