Arabica coffee futures on the New York exchange experienced a historic rally on July 6, with the lead September contract surging 48.75 cents, or 16.2%, to close at 349.95 cents per pound. The move marked the largest single-day percentage gain of the century for the benchmark. The London market also saw significant activity, with the September Robusta contract rising $328, or 8.8%, to settle at $4,044 per metric ton, its highest level in five months.
Market analysts attribute the sharp price increase to a convergence of factors, primarily centered on weather and harvest conditions in Brazil. Persistent rainfall has slowed harvest progress, which stood at 52% complete as of July 1, according to Safras & Mercado, trailing the five-year average of 55%. Furthermore, weather forecasts predicting more rain and a potential risk of frost in key coffee-growing regions like Sul de Minas Gerais and Mogiana Paulista have introduced a significant risk premium into the market.
The rally was amplified by producer behavior, as many in Brazil are reportedly withholding sales in anticipation of higher prices, a strategy supported by a strengthening Brazilian real. While the market volatility is driven by weather fears, preliminary government data for June offered a contrasting signal, showing Brazil's green coffee exports increased by 25.4% year-over-year to nearly 2.8 million bags. The market is expected to remain highly sensitive to weather developments in Brazil over the coming days.