KC U26: 301.00 – 340.70
U26 / Z26: 14.90 – 19.80
Market levels referenced in this update reflect conditions as of June 5, 2026.
The Matrix is Broken
It is hard to look at the coffee market over the last week and not feel like Neo has failed. Wednesday was the relative calm day with “only” an 18 ct swing during trading hours. Monday shattered any sense of normality when the day’s range spanned 57 cts, nearly 20%. On a day when most people were slowly coming back to work after a long holiday weekend, the market was its most volatile in history. No evidence of frost, no cumulative drought, no pest outbreak.
So WTF is going on?
If I were able to give you a precise and accurate account of what has been going on, I would probably be retired, living in the tropics and working behind an espresso machine at a small café on the beach. But as you can tell, from me sitting at my desk and writing this week’s report, I can’t quite do that.
What I can share are a few of the factors I see as playing a role in the market’s absurdity.
Brazil
As the saying goes, “when Brazil coughs, the coffee world catches cold” and we are currently in the southern hemispheres winter season, when frost risk is at its peak in Brazil. The season starts in June, peaks in July and starts to settle out in mid-August. While there have been no reports of observed frosts in the coffee regions, and few if any weather forecasts have predicted temperatures nearing freezing, the market watches every cold front as it forms with jittery anticipation.
In addition to frost risk, the market is dealing with other weather-related issues in Brazil. Above normal wet conditions have slowed the flow of semi washed coffees from producers to the trade, thus putting pressure on the trade who need to cover shorts (sales) for the July shipment period. This is likely part of the reason too, that we have seen the September / December switch widen to nearly 20 cts, as the market is pleading for coffee today.
Coffee Stocks
This bleeds into the next factor, which has been the main cause of the market’s structural inefficiencies over the last several years; coffee stocks at destination warehouses remain at historically low levels. Add to this the concern that large trade houses may be decertifying (long futures and taking delivery of ICE certified stocks) what few stocks there are and holding them out of the market, the concern for coffee availability becomes very real, very quickly.