Coffee Inventories Tighten, Soft Commodities Diverge

【Coffee Inventories Tighten, Soft Commodities Diverge】

⑴ Arabica coffee futures climbed to a one-month high on Friday, as concerns intensified over persistently low exchange inventories and the possibility that replenishment may proceed slower than expected.

⑵ The contract touched around $3.11 per pound intraday, posting a weekly gain of approximately 7% to 8%, and settled near $3.09.

⑶ Exchange-certified stocks fell to roughly 240,000 bags, not far from last month's 27-year low of about 220,000 bags.

⑷ Traders noted concerns that Brazilian supply may not reach exchange warehouses before the December contract expiry, suggesting tight inventory conditions are unlikely to ease in the near term.

⑸ El Niño weather could curb Brazil's next crop output, while a firmer Brazilian real recently has also provided support for coffee prices.

⑹ Robusta coffee moved higher in tandem, gaining about 3% to trade near $3,470 per ton.

⑺ Harvesting of Vietnam's new crop is underway, with industry estimates pointing to output roughly flat year-on-year, though El Niño conditions could impact the 2027/28 crop.

⑻ London cocoa pulled back about 1% after hitting a one-and-a-half-month high midweek, while New York cocoa also edged lower.

⑼ Third-quarter cocoa grinding volumes in major processing regions rose over 14%, with demand further recovering from the 2025 trough, as some institutions see demand rebounding from the slump following the sharp price surge in 2024.

⑽ Raw sugar fell about 2% after touching a 19-month high on Wednesday, with Brazil's Center-South sugar production down 6% year-on-year in the second half of September.

⑾ Excessive rainfall from El Niño has slowed Brazilian production and reduced sugarcane sugar content, while drought in Europe has damaged sugar beet crops, and India has also been affected by dry conditions.

⑿ Market sentiment was rattled by concerns over Trump's tariff rhetoric, with attention now turning to weather developments across producing regions and the pace of inventory replenishment.