Key Highlights

● Arabica coffee fell 0.34% to 285.78 US cents a pound in Thursday's session.

● Brazilian coffee shipments reached about 3.30 million bags by 22 October, up 43.2%.

● Conab raised its 2026 Brazil production estimate to 67.6 million bags.

● ICE arabica stocks stood at 225,610 bags on 27 October, near a 27-year low.

Arabica coffee futures fell 0.34% to 285.78 US cents a pound in Thursday's session on 29 October, trading near their lowest level since 9 October as Brazil's crop prospects improved. The decline arrives on the day Starbucks (NASDAQ:SBUX), which buys mainly arabica, reports fiscal fourth-quarter results after the US close.

The benchmark is ICE US Coffee "C", quoted in US cents per pound, with December 2026 (KCZ26) the front reference. Arabica is down 8.54% on the week and 1.69% on the month, 18.06% since the start of the year and 27.10% from a year ago.

A Big Crop Against Thin Stocks

Coffee is trading between a large expected harvest and very low exchange stocks. Brazil's crop is forecast to be big and exports are running far ahead of last year, which pushes prices down. Certified stocks are close to multi-decade lows, which keeps a floor under the nearest contracts.

Brazil's Currency and Crop

Selling pressure has been linked to the Brazilian real, which fell sharply after President Lula's surprise re-election. The currency has recovered some ground since then but remains below its pre-election level. A weaker real raises the local-currency value of dollar-priced coffee and can encourage Brazilian farmers to sell.

The crop outlook is the bigger driver. Conab raised its 2026 production estimate to 67.6 million bags from 66.7 million, with arabica expected to rise 34.8% to 48.21 million bags. The USDA's Foreign Agricultural Service forecasts a record 2026/27 Brazil crop of 71.9 million bags.

Recent rainfall has supported flowering and early crop development. Minas Gerais received 29.6 millimetres of rain in the week to 25 October, 82% of the historical average, though concerns over irregular rainfall and high temperatures persist.

Global Supply Leans Heavier

Export figures also point to stronger supply flows. Brazilian coffee shipments reached about 3.30 million bags by 22 October, up 43.2% from the same period a year earlier, according to the exporters' council Cecafé.

The International Coffee Organization estimates 2025/26 world production at a record 183.6 million bags against consumption of 180.6 million, a surplus of 3 million bags and the first in five years. The USDA projects 2026/27 world output up 6% to 189.7 million bags, with arabica up 12%.

Thin Stocks Are the Counterweight

ICE arabica stocks stood at 225,610 bags on 27 October, a five-week low and not far above the 27-year low of 217,646 bags set on 15 September. Historically low certified stocks have recently raised concerns about deliveries against the nearest contracts. Colombia, the second-largest arabica producer, saw 2025/26 output fall 15% to 12.65 million bags.

What It Means for Starbucks and Smucker

Starbucks reports after the US close, with consensus expecting revenue of about US$9.23 billion and normalised earnings of about US$0.71 a share. Tariff refunds boosted the previous quarter's margin. Any commentary on coffee costs, purchasing and pricing will be new information for investors.

J.M. Smucker (NYSE:SJM), which sells Folgers and Dunkin' packaged coffee, reported fiscal 2027 first-quarter coffee sales up 13% to US$807.8 million, with net price realisation adding four percentage points because of higher coffee prices. It raised its adjusted earnings guidance to US$10.50 to US$11.00 a share. Falling green coffee prices could eventually pressure the prices Smucker can charge, but the effect depends on contracts, competition and timing.

Coffee Watch: Starbucks' Call, Certified Stocks and Brazil's Flowering

Starbucks' results and commentary, daily ICE certified stock reports, the Brazilian real, Cecafé export data for October and Conab's next crop estimate are the near-term markers. The next USDA coffee outlook will also update global supply and demand forecasts.

Prices could find support if the real recovers, if ICE stocks drift back towards the September low, if flowering weather in Brazil turns dry or if El Niño hurts yields. They could come under more pressure if exports keep running well ahead of last year, if the 2026/27 crop is confirmed as large or if inventories rebuild. Retail prices usually lag futures, so lower futures do not mean cheaper coffee for consumers straight away.