Takeaway

The presenter from StoneX argues that Brazil's 2026-27 record coffee crop is even larger than previously forecast, following an upward revision based on post-harvest data. This supply-side pressure, combined with favorable weather for the developing 2027-28 crop, is creating a bearish outlook for coffee prices.

What the presenter said

• StoneX raised its forecast for Brazil's 2026-27 coffee crop after post-harvest data showed better-than-expected yields. [00:12, 00:21]
• Arabica estimates increased to 51.8 million bags, which is 41% higher than last season. [00:30]
• Robusta production estimates were adjusted slightly higher to 25.4 million bags, though this is still 1.6% below last year's output. [00:41, 00:59]
• Total Brazilian coffee production is now estimated at 77.2 million bags, representing a nearly 24% increase from the previous crop year. [01:09, 01:22]
• While production volume estimates are higher, the presenter notes that heavy rains in June and July negatively affected coffee quality. [02:23]
• Favorable weather for the developing 2027-28 crop is adding further downward pressure on prices. [02:55]
• The presenter states that weather, especially high temperatures in regions like Cerrado, will be important to monitor in the coming weeks for the next crop. [02:58]

Trade ideas

• None stated. The presenter’s analysis implies a bearish market view based on a larger-than-expected current crop and good initial weather for the next one.

Levels and data cited

• Brazil 2026-27 Total Crop Estimate (StoneX): 77.2 million bags
• Brazil 2026-27 Total Crop vs Previous Year: almost 24% increase
• Brazil 2026-27 Arabica Estimate (StoneX): 51.8 million bags (41% higher than last season)
• Brazil 2026-27 Robusta Estimate (StoneX): 25.4 million bags (1.6% below last year)

Risks and what would invalidate this

• The presenter mentioned that heavy rains in June and July affected coffee quality in some regions.
• A larger share of beans fell to the ground before harvest due to these rains.
• High temperatures in growing regions like Cerrado in Minas Gerais could pose a risk to the developing 2027-28 crop.