July arabica coffee (KCN25) Thursday closed down -2.85 (-0.81%), and July ICE robusta coffee (RMN25) closed up +5 (+0.11%).

Coffee prices on Thursday settled mixed, with arabica posting a 1-week low.  Coffee prices remain under pressure from Brazil's coffee harvest.  Brazil's Cooxupe coffee co-op announced Tuesday that its members reported the coffee harvest was 13.7% complete, compared with 13.6% at the same time last year.  Cooxupe is Brazil's largest coffee cooperative and Brazil's largest exporter of coffee.  Also, Safras & Mercado reported that Brazil's 2025/26 coffee harvest was 28% complete as of June 4, just ahead of the five-year average of 27% for the same time of year.

Robusta coffee recovered from a 1-week low Thursday and posted modest gains as signs of tighter supplies sparked short-covering in robusta futures.  ICE-monitored robusta coffee inventories fell to a 3-week low Thursday of 5,184 lots.  

Coffee prices have been under pressure over the past five weeks, with arabica coffee falling to a 2-month low last Tuesday and robusta dropping to a 7-1/4 month low due to concerns about higher coffee production and ample supplies.  On May 19, the USDA's Foreign Agricultural Service (FAS) forecast that Brazil's 2025/26 coffee production will increase by 0.5% year-over-year (y/y) to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to 31 million bags.  Brazil is the world's largest producer of arabica coffee, and Vietnam is the world's largest producer of robusta coffee.

Recent above-normal rainfall in Brazil has eased concerns about dryness and is bearish for coffee prices.  Somar Meteorologia reported Monday that Brazil's biggest arabica coffee growing area of Minas Gerais, received 23.4 mm of rain the week ended June 7, 207% of the historical average for this time of year.

In a bearish factor, ICE-monitored arabica coffee inventories rose to a 4-1/4 month high of 892,468 bags on May 27.

Smaller coffee exports from Brazil are bullish for prices.  On Wednesday, Cecafe reported that Brazil's May green coffee exports fell -36% y/y to 2.8 million bags.

Robusta coffee has support from reduced robusta production.  Due to drought, Vietnam's coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years.  Also, Vietnam's General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT.  Last Tuesday, Vietnam's National Statistics Office reported that Vietnam's 2025 Vietnam's Jan-May coffee exports are down -1.8% y/y to 813,000 MT.  In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags.   Conversely, the USDA's FAS on May 19 projected that Vietnam's 2025/26 robusta coffee crop would climb +7% y/y to a 4-year high of 30 million bags.

The USDA's biannual report on December 18 was mixed for coffee prices.  The USDA's Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags.  The USDA's FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24.

For the 2025/26 marketing year, Volcafe projects a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.