GSX Coffee Market Update - November 2025

Any market or trading views are in no way are to be considered investment advice.

November stripped away some of October’s drama but left the market no less conflicted. Political noise faded, balance sheets firmed, and prices oscillated within a tightening range—frustrating directional traders while rewarding patience. The core tension remains unresolved: a credible 2026/27 surplus story colliding with immediate scarcity, low stocks, and a deeply inverted curve.

Early optimism around tariff relief gave way to confirmation. On November 20, the Trump administration formally rescinded the “reciprocal” additional ad valorem duties on coffee imports imposed under EO 14323. The market’s initial reaction was blunt: NY sold off hard to 352¢/lb before recovering as participants reassessed flow implications rather than headlines.

The practical impact is meaningful. U.S. roasters can once again price Brazil forward without tariff distortion, particularly for Q2–Q3 2026 coverage. While not an immediate demand catalyst, the removal of policy friction restores optionality to blend economics.

In Europe, the EUDR clock moved back. Following member-state alignment, the European Parliament delayed implementation to December 30, 2026 for large companies and June 30, 2027 for small firms. Regulatory pressure shifts from imminent to structural—important, but no longer dictating near-term trade behavior.

November trade compressed into a broad 360–400¢/lb rhythm. Attempts to reclaim the September–October highs failed early, with rallies stalling below 400¢ as speculative length hesitated to extend amid improving supply forecasts. Conversely, selloffs repeatedly found support in the mid-360s, reflecting low stocks, strong inversion economics, and limited producer selling.

March 26 NY, which rejected the 405–415 zone in September and October, struggled again to sustain momentum above 390–400. Each dip toward 360–370 attracted buying interest, reinforcing that downside remains structurally constrained even as upside enthusiasm fades.

For most of the month, NY traded without fresh COT data, adding to the sense of drift. The CFTC has now updated positioning through October 14, showing net non-commercials at +28,157 lots and net index length at +38,443. Volcafe’s late-November estimates place speculative length closer to +31,000 lots.

This is length, but not extreme length—enough to fuel volatility, insufficient to force capitulation. The absence of aggressive systematic selling remains notable, a direct consequence of curve inversion.

Post-flowering balance sheet updates leaned consistently surplus-oriented, if not dramatically so.

ECOM held global production at 188.1 million bags against demand of 178.2, a 9.9 million bag surplus. Brazil 26/27 is pegged at 75.8 million bags, up sharply from 64.4 million in 25/26. Marex echoed the theme with a 10.2 million bag surplus, while StoneX’s Brazil estimate came in lower at 70.7 million but still meaningfully higher year-on-year.

Vietnam estimates softened modestly versus last season, while Rabobank framed the consensus: a 7–10 million bag global surplus in 26/27 and an eventual arabica equilibrium in the $2.50–$3.00/lb range.

The takeaway is less about precision and more about direction. The trade increasingly agrees that supply improves meaningfully beyond the current crop year—even if the path there remains uneven.

Brazil received broadly beneficial November rains, particularly across Sul de Minas and adjacent regions, supporting fruit set and easing earlier dryness concerns. Conditions there have stabilized rather than accelerated bullish narratives.

Vietnam, by contrast, struggled with excessive rainfall during harvest. Typhoon Kalmaegi (No. 13) impacted Gia Lai, while a mid-November system proved less disruptive. The risk is not crop loss but delays and quality variability—issues that matter for nearby flows more than headline production numbers.

High prices are beginning to bite. J.M. Smucker reported F2Q net sales up 11%, driven entirely by pricing, alongside a 6% decline in volumes. In Brazil, large national brands continue shifting blends toward 100% conilon, reinforcing evidence of consumer trade-down.

These signals point in the same direction: revenue resilience masking volume pressure. The U.S. and Brazil—the two largest consuming markets—are both showing early-stage demand softening.

Certified stocks at destination remain historically low, and roasters continue to price hand-to-mouth rather than rebuild coverage. The curve stayed firmly inverted, with a near-15% annualized carry penalty that effectively blocks systematic short participation.

Brazilian farmers remain disciplined sellers. Well capitalized and mindful of year-end tax exposure, they have shown little urgency to scale up sales despite attractive local prices. Trade houses remain short Brazil and Central American differentials into Q1 2026, betting on improved physical availability ahead.

November’s London issuance concentrated ownership with a single entity, reviving familiar questions around stopper behavior and January intentions. December/March spreads remain inverted by more than 30¢—a structure that continues to punish complacency.

The constructive argument remains structural rather than emotional: destination stocks are low; the curve is deeply inverted; producer selling is disciplined; roasters remain under-covered; and trade shorts in forward differentials could be vulnerable if flows disappoint. Even modest disruptions could tighten nearby structure further.

The opposing view is increasingly coherent. Supply growth into 26/27 looks real. Central America, Colombia, and Vietnam all add volume as Brazil recedes as the sole seller. Demand elasticity is no longer theoretical. Political risk has eased rather than intensified. And at these price levels, agronomic incentives are powerful—maximum husbandry, aggressive harvesting, and new plantings all point toward future relief.

November reinforced that this is not a market for conviction trades. The long-term trajectory may well be lower, but timing remains hostage to liquidity, structure, and stocks. Until certified inventories rebuild and inversion softens, the market demands tactical engagement: fade extremes, respect structure, and let flows—not forecasts—set risk.

A weather setback in Brazil during cherry development would quickly tighten nearby spreads. A surprise rebuild in certified stocks would calm volatility and cap rallies. Policy shifts or targeted trade exemptions could rewire flows faster than balance sheets imply. Deeper demand erosion in core markets could limit upside even with structural support intact.