Just noticed the coffee market showing some interesting cross-currents today. March arabica is barely holding gains while robusta took a hit, dropping to 4-week lows. The story here is Brazil - heavy rains hit Minas Gerais last month (almost 70mm, well above normal), which is great for next year's crops but killing prices right now. Conab bumped up their 2025 production forecast to 56.54 million bags back in December, and Vietnam's cranking out record robusta volumes too.

The supply picture is pretty bearish overall. Vietnam's 2025 exports jumped 17.5% year-over-year, and they're projecting even higher output for 2025/26. ICE inventories have been recovering after hitting lows earlier in the year, which adds more downward pressure. Brazil's December green coffee exports actually fell though, down 18.4% from the prior year, so there's some tightness mixed in.

FAS is forecasting world production hitting record levels in 2025/26 at 178.8 million bags, but with arabica down and robusta surging. The Brazil results show strong supply growth ahead, but near-term price weakness seems locked in as long as these favorable growing conditions hold.