Caught the coffee selloff today and it's pretty clear what's driving it. May arabica coffee futures dropped 0.95% and robusta took a 1.83% hit after both had bounced earlier in the session. The real culprit? Brazil's currency tanked to a 1.5-month low against the dollar, which basically opened the floodgates for Brazilian coffee producers to start exporting aggressively. When the real weakens like that, it makes their product cheaper on the global market, so they dump supply.

There were some brief bullish signals this morning - the Iran situation had shipping rates climbing through the Strait of Hormuz, which would normally push import costs higher. Plus, decent rainfall in Minas Gerais over the past few weeks looked constructive for Brazilian crops. But honestly, those positives got completely overshadowed by the supply story.

The bigger picture is that coffee's been getting hammered for weeks now. Brazil's forecasting agency came out saying 2026 production is headed for a record 66.2 million bags, up 17% year-over-year. Vietnam's also crushing it - their January exports jumped 38% and they're on track for a 4-year production high. Meanwhile, ICE arabica coffee inventory levels have been recovering from lows, which isn't helping prices either. Colombia's output is down significantly, but that's not enough to offset the supply surge coming from the major producers. The whole market's basically priced in a bumper crop scenario at this point.