Just noticed coffee prices took a pretty solid hit on Friday. Arabica dropped over 3.8% and robusta fell about 1.6%, with arabica hitting its lowest point in months. The main culprit? Heavy rains are expected in Minas Gerais, Brazil's coffee heartland, over the next week or so.

The supply picture is what's really weighing on the market right now. Brazil's crop agency bumped up their 2025 production forecast to 56.54 million bags back in December, and Vietnam keeps pumping out robusta coffee at record levels. They exported 1.58 million metric tons in 2025 alone, up 17.5% year-over-year, and are projecting even higher output for 2025/26. That's a lot of supply hitting the market.

Interestingly though, there are some mixed signals if you dig into the details. Brazil's December coffee exports actually fell 18.4%, which would normally support prices. And Minas Gerais has been getting below-average rainfall lately—only about 53% of normal for the week ending January 16. So there's tension between the bearish supply outlook and these tighter near-term conditions.

ICE inventory data shows arabica stocks recovered to a 2.5-month high of 461,829 bags by mid-January after hitting multi-year lows, while robusta inventories also bounced back. The USDA is projecting world coffee production will hit a record 178.8 million bags in 2025/26, though arabica specifically is expected to decline 4.7%. If you follow commodity analysis from sources like Barchart, you know these production forecasts usually dominate the price narrative.

Looking at the bigger picture, global coffee exports are actually down slightly year-over-year according to the ICO, which would normally be bullish. But with Vietnam's robusta surge and Brazil's rising production estimates, the coffee market seems caught between tightening supplies in some areas and abundance concerns elsewhere. The near-term pressure is clearly on prices though—arabica's at its lowest in 5.5 months for a reason.