Caught coffee futures closing mixed on Friday - May arabica up just 0.11% while robusta dropped 0.80%. Both contracts are consolidating after getting hit hard over the past few weeks. Arabica fell to 15-month lows and robusta touched 6.25-month lows as the market digests some pretty bullish supply news coming out of Brazil and Vietnam.

I've been following the coffee supply situation closely, and the numbers are pretty clear why prices are under pressure. Brazil's forecasting agency came out with projections showing their 2026 coffee crop climbing 17.2% year-over-year to a record 66.2 million bags. Vietnam's also ramping up - their January exports jumped 38.3% and they're projected to hit a 4-year production high. Even the ICE inventories have been recovering from their lows, which isn't helping the price action. Colombia's the only bright spot, with production down 34% last month, but that's not enough to offset what's happening elsewhere.

Dollar weakness on Friday did spark some short covering in the coffee futures, which is why we saw that modest recovery. Looking at the bigger picture though, with global coffee production expected to hit record levels and inventories rebuilding, the structural headwinds seem pretty strong. The USDA's projecting world coffee output up 2% for 2025/26, so unless something changes with weather or demand, this consolidation could be setting up for further downside pressure.