Coffee prices took a hit on Wednesday, with March arabica dropping 3.31% and January robusta sliding 1.25%. The culprit? Rain forecasts for Brazil's coffee belt—ironically bearish for prices despite being good for crops.

Here's the plot twist: US tariffs are actually keeping prices afloat. Brazil's coffee exports to America face a hefty 40% tariff (beyond the 10% reciprocal rate), causing US buyers to ghost Brazilian coffee deals. Result? ICE arabica inventories hit a 1.75-year low at 396,513 bags.

But headwinds are piling up. Vietnam—the world's largest robusta producer—is ramping up, with 2025/26 production projected to hit 1.76 MMT (+6% YoY, a 4-year high). StoneX forecasts Brazil will pump out 70.7M bags in 2026/27 (+29% YoY), flooding the market.

Global supplies are tightening though. ICO reported Oct-Sep coffee exports fell 0.3% YoY to 138.66M bags. And Brazil's 2025 arabica crop got trimmed by Conab—down 4.9% to 35.2M bags.

Bottom line: Coffee's caught between tariff-driven supply crunches and looming production surges. Traders are juggling weather, politics, and global supply shifts.