Coffee Futures & Currency Report for October 20th - October 26th, 2025 One!

Last week was an exciting week, like sprinting through a storm! The coffee futures market sprinted to an 8.5-month high of 423.95 cents/lb on October 23rd, but then suddenly it started to rain, dropping to a two-week low over the weekend. It felt like I was chasing a ball in the park when suddenly another dog snatched it away!

Price trend: It was a roller coaster with mountain climbing and slides!

Around October 20th, coffee prices started the week at around 390-400 cents per pound . They continued to rise on the 22nd and 23rd, reaching 423.95 cents per pound on October 23rd , marking six consecutive trading days of increases! The entire market was excited, like a delicious snack discovered on a walk. However, things started to change from the 24th. With news of possible rain in Brazil, prices began to plummet. According to Trading Economics data, prices fell to 387.35 cents per pound on October 29th (down 0.59% from the previous day). Looking at the start of the week, it was like a seesaw. However, there is good news in the bigger picture! Prices are up 3.33% over the past month and up a whopping 55.36% year-on-year . That's enough to make a dog's tail wag all year!

Why did he jump so much? 5 reasons even your dog can understand

1. Brazil's weather is a roller coaster

The weather in Brazil's Minas Gerais state (the world's largest Arabica producer) has been fickle like a dog. The week ending October 18th saw 44.7mm of rain (136% of the historical average!) , which gave the market a sigh of relief. However, the week ending October 24th saw a return to extreme drought with only 0.3mm of rain (1% of the historical average!) . According to a report by Somar Meteorologia, this could have serious implications for the 2026/27 harvest.

2. Hikaru Akira on the US tariff issue!

This was the biggest news of the week! On Sunday, October 26th, Brazilian President Lula and US President Trump met at the ASEAN Summit in Malaysia . After the meeting, President Lula announced, "I'm confident that a final resolution will be reached within a few days." Currently, Brazilian coffee is subject to a 50% tariff (effective since August 1st), which has been putting pressure on US supplies. However, this meeting has raised hopes for the tariff removal, and prices have calmed down a bit over the weekend. It's like a sense of relief, like your owner promising to give you treats!

3. ICE inventory is extremely low!

This is a very important point! ICE-certified inventory has fallen to a whopping 465,910 bags , the lowest level in 19 months . The 50% tariff has caused U.S. buyers to cancel new contracts for Brazilian coffee, which is causing inventory to plummet. Since roughly one-third of the raw coffee consumed in the U.S. comes from Brazil, this is a major issue!

4. The Threat of La Niña

The National Oceanic and Atmospheric Administration (NOAA) has raised the probability of La Niña occurring between October and December to 71% . La Niña could further dry out Brazil, threatening the 2026/27 harvest. It's a sense of unease, like a sudden thunderclap while you're out for a walk.

5. Volcafe's grim predictions

Volcafe, a major coffee trader, predicts that the global Arabica deficit will be 8.5 million bags in 2025/26 (up from 5.5 million bags the previous year). This will mark the fifth consecutive year of supply shortage . It's like having a dog food shortage for five years in a row... I can't even imagine it!

A balance of good and bad news

◎ Good news (tail wagging)

-Vietnam 's Robusta production is booming! Exports from January to September 2025 are expected to reach 1.23 million tons (up 10.9% year-on-year) , and 31 million bags (up 6%) for the 2025/26 fiscal year, the highest level in four years. -US-Brazil tariff negotiations are progressing! A path to a resolution is emerging at the October 26th meeting. -Rain is forecast in some areas , easing short-term drought concerns.

Bad news (ears down)

- Brazil's extreme drought was recorded in the week of October 24th, raising serious concerns about the 2026/27 harvest. - Historically low ICE inventories are exacerbating supply tightness. - There is a 71% chance of La Niña occurring , raising the risk of further drought. - Volcafe's forecast of a fifth consecutive year of losses is fueling market uncertainty.

The yen and dollar were in "bullish mode"

In the foreign exchange market, the USD/JPY was strong throughout the week . Around October 20th, it started the week in the 150-151 yen range and rose toward the weekend. On October 27th, it hit a weekly high of 153.14 yen (according to Wise data). This represented a 1.47% rise in the dollar and a fall in the yen since October 20th . For Japanese coffee importers, the strong dollar pushed up import costs. It may have felt like the price of snacks had gone up...

This week's walking course (highlights)

Here are some points to keep an eye on next week (October 27th - November 2nd): 1. Updates on the US-Brazil tariff negotiations - President Lula said that "it will be resolved within a few days," so there may be some announcement at the beginning of the week! This is the most important point. 2. Rainfall forecast for Brazil - According to Climatempo (Brazil's meteorological agency), more than 30mm of rain is expected from Sao Paulo to Minas Gerais this week. If this comes to fruition, prices may stabilize. 3. Fluctuations in ICE stocks - Will they fall further from the extremely low level of 465,910 bags, or will they recover slightly? This will determine the direction of the market. 4. News related to La Niña - Will the 71% probability of occurrence increase or decrease? Keep an eye on the latest forecast from the meteorological agency. 5. Next report from Conab - There is a possibility that Brazil's agricultural statistics agency, Conab, will further revise its 2025 harvest forecast downwards.

Next week's predictions (with full dog intuition)

↑ Bullish scenario (tail wagging)

If there is no progress in tariff negotiations or rains in Brazil disappoint, prices could rise again in the 410-430 cents/lb range. The market could go into panic mode, especially if ICE inventories fall further.

↓ Bearish scenario (depressed)

On the other hand, if the tariff removal is officially announced or if there is sufficient rainfall in Brazil, prices could adjust to 380-400 cents/lb . A good harvest forecast in Vietnam could also act as a downward pressure.

★ Dog's favorite prediction

Overall, I expect the price to fluctuate in the range of 390-415 cents/pound in the short term. There's a high possibility of big movements depending on how the tariff issue develops, so it's extremely important to keep an eye on the news! Technically , the focus will be on whether the price can break through the high of 423.95. If it does, it will open the way to 430-440, but if it fails, a correction to the 380 range is possible. As for the exchange rate, I expect USD/JPY to be in the range of 151-154 yen . It depends on Japan's monetary policy and US economic indicators, but the current trend of a strong dollar is likely to continue.

Lastly, some advice from the dog

This week's market was buffeted by two major uncertainties: political risk (tariffs) and weather risk (drought) . The U.S.-Brazil summit on October 26th was announced during a weekend with low trading volume, so market reaction next Monday will be closely watched. Considering Volcafe's forecast of a fifth consecutive year of losses and ICE inventory at historically low levels, we believe coffee prices will continue to rise in the medium to long term . However, a resolution to the tariff issue could lead to temporary adjustments in the short term, so it's important to carefully manage your positions. Regarding data reliability : This report compiles information from over 15 reliable sources, including Trading Economics, Barchart, Somar Meteorologia, ICO, Volcafe, Exchange-rates.org, and Wise. However, some data from October 24 onward includes preliminary and estimated values, so the accuracy of the data should be approximately 85%. In particular, ICE inventory figures fluctuate daily, so we recommend checking the latest official data. *Invest at your own risk, be careful and wag your tail!