Oneco Analyst Weekly Report: Market Analysis for November 3rd-7th

Last week the coffee market soared like a dog that had just found a big bone!

Arabica coffee futures showed a strong uptrend from Monday to Friday.
By the weekend, it had soared to 411.40 cents/pound , a whopping 3.69% increase from the previous day!
It was like he was sprinting at full speed in his favorite park!

Over the past month , it has increased by 6.83% , and compared to the same period last year, it has increased by a whopping 62.12% !
These are truly impressive numbers and proof that the coffee market is still running with its tail wagging!

Why are they so energetic? 5 reasons even dogs can understand

1. ICE stock is plummeting! (Very important point)
ICE-monitored arabica inventories fell to 467,110 bags , the lowest level in 19 months .
Everyone is panicking, as if their favorite snack is about to run out of stock!
Robusta coffee stocks have also fallen to 5,926 lots , the lowest level in 3.5 months.

2. The US 50% tariff is having a major impact!
The Trump administration has imposed a 50% tariff on imports from Brazil, which has led to a sharp decline in ICE stocks.
U.S. roasters are canceling contracts for new Brazilian coffee, tightening supplies.
With roughly one-third of all unroasted coffee in the United States coming from Brazil, this is a really big problem!
The Senate passed a resolution to eliminate tariffs, but it is reported that it will be difficult for the House of Representatives to pass it.

3. I'm worried about the weather in Brazil...
Brazil is facing its worst drought since 1981 .
In Minas Gerais (Brazil's largest Arabica producing region), there were weeks when rainfall was well below average.
Only 20.2mm of rain fell in the week of October 11th (48% of the average) .
However, there are signs of some improvement, with 44.7mm of rain (136% of the average) falling in the week of October 18th.

Additionally, NOAA has announced that the probability of La Niña occurring has increased to 71% , which could bring even more dryness to Brazil.
It is said that this may have a negative impact on the 2026/27 coffee crop.

4. Volcafe and Conab cut production forecasts <br />Research firm Volcafe has forecast Brazilian Arabica production at 34.4 million bags in 2025/26.
This is about 11 million bags less than the previous estimate!
Volcafe is forecasting a shortfall in Arabica coffee supply for the fifth consecutive year, with a shortfall of 8.5 million bags expected in 2025/26.

Brazil's government crop forecasting agency, Conab, also lowered its 2025 arabica production forecast by 4.9% to 35.2 million bags .

5. Vietnam's Robusta production is booming, but...
Vietnam is set to achieve record exports of over 1.5 million tons, worth $8.4 billion, in 2024-2025!
Production in 2025/26 is forecast to increase by approximately 10% to 31 million bags .
However, this is mainly Robusta coffee, and it is said that it may not be able to fully make up for the Arabica supply shortage.

Good news and worrying news

[Good News - Wagging Tail]
✓ Robusta coffee supplies are stable thanks to strong exports from Vietnam. ✓ Rainfall is showing signs of improving in some parts of Brazil. ✓ High prices are helping growers earn more.

[Worrying News - Flat Ears]
✗ Ice-cream inventories are at historic lows, causing ongoing supply instability. ✗ The 50% US tariff has been in effect since August, and exports from Brazil are reported to have fallen by more than 80%. ✗ There is a 71% chance of the La Niña phenomenon occurring, raising the risk of further dryness. ✗ Arabica coffee is predicted to experience a supply shortage for the fifth consecutive year.

The yen and the dollar were in a "slightly weaker yen" mode.

Last week's USD/JPY exchange rate fluctuated in the range of 152.965 yen to 154.335 yen .

On November 7th, it closed at 153.425 yen , up 0.24% from the previous day (a slight weakening of the yen).
One's weekly fluctuation was -0.38% , a relatively stable movement.

After hitting a weekly high of 154.335 yen on November 4th, the yen fell to a weekly low of 152.965 yen on November 7th.
The foreign exchange market had a calm atmosphere, like taking a leisurely stroll in the park.

In contrast to the sharp rise in the coffee market, the foreign exchange market was relatively quiet.
Fortunately for Japanese importers, there was no major exchange rate risk!

This week's walking course (points to note)

1. Check ICE inventory trends every day!
With stocks at a historic low of 467,110 bags, it's extremely important to see if they decrease any further.
If inventory falls further, it will fuel price increases!

2. The future of US tariffs <br />The Senate passed a resolution to eliminate tariffs, but decisions are still pending in the House of Representatives and the Supreme Court.
Also keep an eye on the "No Coffee Tax Act" movement!
If tariffs were lifted, prices could fall significantly.

3. Rainfall data for Brazil
I'll be sure to check out the weekly reports from Somar Meteorologia and Climatempo!
November and December are the crucial flowering period, so rainfall will have a direct impact on the 2026/27 crop.

4. Latest report from Volcafe and consultants <br />It will be interesting to see how major analysts and traders revise their outlook for supply shortages.
Follow reports from StoneX, Rabobank, Safras & Mercado, and more!

5. Vietnam's export pace
Wang will be watching to see if exports in 2025/26 go as smoothly as predicted.
It will be interesting to see how the increased supply of Robusta affects Arabica prices!

6. Technically Important Levels
420 cents/pound may be a key resistance level.
If we can break through that, there's a chance it could rise even further!

This week's predictions (including my dog's intuition)

[A bullish scenario - full swing of the tail!]
If ICE stocks fall further and rainfall in Brazil remains scarce, prices could rise to the 420-435¢/lb range!

In particular, if news emerges that US tariffs will continue, supply concerns will increase further, pushing up prices.
New predictions about the La Niña phenomenon could also be a positive.

Technically, if we can break through 420 cents, the next target could be 430-435 cents!

[Weak Scenario - My ears are a little flat...]
Conversely, if the US Congress makes progress in removing tariffs or if there is more rain than expected in Brazil, profit-taking could occur, leading to a correction to 395-405 cents/lb .

Additionally, news of increased Robusta supply from Vietnam and speculators liquidating their positions could put downward pressure on prices.

Technically, 400 cents is likely to be an important support line.
If it breaks through this level, there is a possibility of further decline, so we need to be careful!

[Dog's overall judgment]
Looking at the current fundamentals, I think there is a bullish bias in the short term .
Historically low ICE inventories and continued US tariffs are providing significant support.

However, profit-taking selling is likely to occur around 420 cents , so caution is required.
In the medium term, the weather situation in Brazil and the evolution of the La Niña phenomenon will be key!

As for exchange rates, the USD/JPY is stable at around 153 yen, so there does not appear to be any major exchange risk for Japanese importers.
However, we must always pay close attention to the trends in monetary policy in Japan and the United States!


*Invest at your own risk, be careful and wag your tail!


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[Data source]
- Trading Economics: Coffee Prices and Exchange Rates
- Nasdaq/Barchart: ICE inventory data and market analysis
- Somar Meteorologia/Climatempo: Brazilian meteorological data
- NOAA: La Niña forecast
- Volcafe, Conab, Safras & Mercado: Production forecast
- Vietnam Coffee-Cocoa Association (Vicofa): Vietnam Export Data
- USDA FAS: World Production Forecast
- Coffee Intelligence, NPR, Reuters: U.S. Tariff Information
- Wise, Exchange-rates.org: Exchange rate details