Coffee futures are going to To da moon today ☕

Robusta coffee (January contract) rose 2.37% to 107 cents, reaching a two-week high. Arabica coffee also increased by 0.57%.

Two major driving forces:
1️⃣ Heavy rain in Vietnam - The heavy rain in the Central Highlands of Vietnam's largest coffee-producing province, Dak Lak, has delayed the harvest, with further rainfall threatening production.
2️⃣ Weak dollar - Dollar depreciation triggers short covering

Deeper matters:

U.S. coffee inventories are shrinking. ICE Arabica stocks have fallen to a 1.75-year low (396,000 bags), and Robusta inventories have also hit a 4-month low. This is due to Trump's 40% tariff on Brazilian coffee scaring away U.S. buyers – one-third of U.S. coffee comes from Brazil, and imports of Brazilian coffee to the U.S. plummeted by 52% from August to October.

But this is not all good news:

Vietnam's production is skyrocketing. Coffee production in Vietnam for the 2025/26 season is expected to reach a four-year high of 1.76 million tons (up 6% YoY), and overcapacity will put pressure on prices. Brazil also plans to increase production by 29%, leading to a record global coffee production next year.

Conclusion: Short-term supply tightness + geopolitical support for prices, but long-term capacity release is a hidden danger.