Brazil's March Weather Pattern and Its Global Impact on Coffee Markets

Coffee markets face mounting pressure as Brazil’s main growing regions experience above-average rainfall in early 2026. While the weather conditions support increased yields for the world’s largest arabica producer, they create significant headwinds for coffee futures prices. March arabica contracts stand slightly positive at +0.39%, though robusta has declined 2.24% to touch 4-week lows, reflecting the complex dynamics shaping global coffee supply and demand.

Record Precipitation in Brazil’s Coffee Heartland

Brazil’s weather patterns in March have delivered substantially higher moisture to critical growing regions. Minas Gerais, Brazil’s largest arabica coffee-producing area, received 69.8 mm of rainfall during the week ended January 30, representing 117% of the historical average according to Somar Meteorologia. This significant precipitation exceeds normal seasonal patterns and signals robust conditions for crop development across the region.

The implications of Brazil’s sustained moisture levels extend beyond immediate yield benefits. Consistent rainfall in the coffee-growing season translates to healthier plant development, yet market participants recognize this as bearish for near-term pricing. The combination of above-average precipitation and favorable weather forecasts for the coming weeks has created sustained selling pressure across both arabica and robusta futures contracts.

Global Coffee Supply Expansion Reshaping Market Dynamics

The Brazilian weather picture connects to a broader transformation in global coffee supplies. Conab, Brazil’s official crop forecasting agency, raised its total 2025 coffee production estimate by 2.4% in December to 56.54 million bags, up from 55.20 million bags projected in September. This upward revision reflects improved growing conditions and stronger production expectations for the current season.

Vietnam’s dramatic supply surge presents an additional challenge for coffee prices. Vietnam’s National Statistics Office reported that 2025 coffee exports jumped 17.5% year-over-year to 1.58 million metric tons, establishing Vietnam as an increasingly dominant force in global robusta markets. Vietnamese production is projected to climb 6% year-over-year to 1.76 million metric tons in 2025/26, marking a 4-year high.

The Vietnam Coffee and Cocoa Association indicated in late October that Vietnamese output could rise 10% higher than the previous crop year if favorable weather conditions persist. As the world’s largest robusta producer, Vietnam’s expanding supply footprint directly pressures robusta futures—explaining the sharper declines in RMH26 contracts compared to arabica benchmarks.

Market Inventory Recovery and Technical Dynamics

Recent developments in exchange-monitored coffee inventories reflect shifting supply dynamics. After declining to a 1.75-year low of 398,645 bags in November, ICE arabica inventory recovered to 461,829 bags by mid-January. Similarly, robusta inventories fell to 1-year lows in December but have subsequently recovered to 1.75-month highs, signaling rebuilding stocks and easing tightness concerns.

The recovery in inventory positions removes a key price support factor that had underpinned coffee futures through much of 2025. With supplies becoming more abundant, the technical backdrop for sustainable price rallies deteriorates. This inventory reversal compounds the bearish implications of Brazil’s above-average weather and Vietnam’s expanding production footprint.

2025/26 Production Forecast: Mixed Signals for Arabica and Robusta

The USDA Foreign Agriculture Service painted a nuanced picture for the 2025/26 season in its December outlook. Global coffee production is projected to increase 2.0% year-over-year to a record 178.848 million bags, yet this masks divergent regional trends. Arabica production is expected to decline 4.7% to 95.515 million bags, while robusta surges 10.9% to 83.333 million bags.

For Brazil specifically, the FAS forecast indicates 2025/26 coffee production will contract 3.1% year-over-year to 63 million bags, a modest decline from prior years. Vietnam’s output, by contrast, is projected to rise 6.2% year-over-year to 30.8 million bags—a 4-year high. Globally, ending stocks are expected to fall 5.4% to 20.148 million bags from 21.307 million bags in 2024/25, suggesting modest supply tightening at the season’s conclusion.

Looking Ahead: The March Weather Factor in Coffee Pricing

The confluence of Brazil’s excess precipitation, Vietnam’s robust production growth, and recovering inventory levels creates a challenging environment for coffee prices. While Brazilian exporters saw December shipments decline—with green coffee exports falling 18.4% year-over-year to 2.86 million bags—this modest reduction does little to offset the broader supply abundance reflected in production forecasts and inventory recoveries.

The International Coffee Organization reported in November that global coffee exports for the current marketing year fell just 0.3% year-over-year to 138.658 million bags, indicating sustained export momentum despite tighter conditions. Brazil’s weather patterns in March, rather than creating immediate supply constraints, instead reinforce expectations of ample global supplies through the 2025/26 season.

Coffee market participants continue monitoring Brazil’s precipitation closely, as the weather remains a critical variable in the broader supply-demand calculus. However, the current atmospheric patterns—delivering above-average rainfall to major arabica regions—appear likely to sustain downward pressure on coffee futures through the seasonal period.