Coffee just got hit hard—Trump's tariff exemption on Brazilian food just tanked arabica futures by 3.09% to a 7-week low. Here's what went down:

March arabica dropped 11.65 cents, January robusta fell 143 points. The move accelerated after Brazil's real weakened to a 1-month low vs the dollar, making Brazilian coffee exports suddenly way more attractive and flooding the market.

But here's the plot twist: US stockpiles are actually tightening. ICE arabica inventories hit a 1.75-year low (398,645 bags), robusta at 4-month lows (5,567 lots), because American buyers ditched Brazilian coffee during the tariff period. US imports from Brazil dropped 52% from Aug-Oct last year.

Weather's also a factor—heavy rains forecast for Brazil's Minas Gerais region could boost crops (bearish), but Vietnam's getting hammered by downpours delaying harvests, which supports robusta prices.

The kicker? StoneX projects Brazil's 2026/27 output at 70.7M bags (+29% y/y), and Vietnam's ramping up to 1.76M tons. Global supplies tightening slightly year-over-year, but with these production forecasts looming, the coffee rally might face headwinds.