The market’s focus remains on the potential reduction of U.S. tariffs on Brazilian coffee, alongside the recent rainfall in key production areas in Brazil. These two factors have bolstered optimism regarding the 2026 harvest and expectations for a gradual recovery in Arabica supply balance.

Throughout the week, many coffee-growing regions, particularly in southern Minas, experienced rainfall. Although it was below historical averages, it was sufficient to improve soil moisture and support crop growth, enhancing market confidence in Brazil’s production forecasts for the next season and alleviating some downward pressure on New York prices and spreads.

In the currency market, the U.S. dollar closed at levels near 5.45 Brazilian reais, influenced by the government’s announcement to expand the national housing program, which raised financial concerns. Additionally, the government’s recent failure to increase revenues contributed to rising pressures, prompting some foreign investors to liquidate their positions.

Regarding exports, Brazil shipped approximately 3.750 million bags during September, according to CeCafé data. However, shipments to the United States sharply declined to around 330 thousand bags, less than half the quantity recorded in September 2024. In contrast, exports to Colombia were six times higher during the same period.

Domestically, sales activity remains moderate. As of October 8, approximately 54% of the 2025/26 crop had been marketed according to estimates by Safras & Mercado, which projects Arabica production at 38 million bags and Conilon at 25 million bags. For comparison, sales during the same period last year reached 62%, reflecting farmers’ caution in retaining a larger portion of their crop.

Futures and forward contracts for the upcoming season remain slow as well, with offers below current spot price levels. Recent price fluctuations have also slowed the conclusion of new commitments. Estimates by Safras & Mercado indicate that forward sales in key regions do not exceed 12% to 15% of the expected production for the next season, a limited percentage, but reflective of producers’ defensive approach given current market conditions.

Regarding FOB prices, inquiries about Conilon have increased, although current spreads remain high enough to prevent demand activation. In Arabica, some limited transactions were executed for shipments spanning December to March, yet overall trading activity remains moderate, with notable variation among seller offers.

In conclusion, the Brazilian coffee market appears to be in a delicate state of anticipation. Recent rainfall provides a glimpse of optimism regarding the next season’s harvest, while ongoing economic fluctuations and financial policies continue to influence price movements. With producers adopting a defensive approach and retaining part of their crops, the 2026 season remains sensitive and warrants careful monitoring by both investors and farmers, amid a clear divergence between gradual recovery prospects and current pressures on prices and spreads.