By Evie Liu

Coffee prices are heating up again. Arabica coffee futures -- contracts that let traders bet on the future price of coffee -- recently climbed above $2.70 a pound, their highest level since late May.

In one sharp move, coffee futures jumped more than 5% on Tuesday, after having fallen to a 19-month low only a week earlier. By Tuesday's close, prices had gained more than 13% over five trading days. The futures have edged lower on Wednesday and Thursday to trade around $2.66 a pound.

That kind of reversal is unusual even for coffee, a commodity known for big swings.

The immediate trigger is weather. Heavy rain in Brazil, the world's largest coffee producer, has disrupted the harvest and raised concerns about bean quality. Coffee is usually harvested during Brazil's drier winter season. Too much rain can slow field work, cause berries to fall from trees, and increase the risk of disease. Traders worry that even a temporary delay could tighten available supply.

The weather scare comes after several turbulent years for coffee. Prices surged in 2024 and 2025 as drought and extreme weather hit major growing regions. Robusta, the cheaper and more bitter bean often used in instant coffee and espresso blends, was especially squeezed by poor weather in Vietnam. Arabica, the smoother bean used in many premium coffees, was also hurt by Brazil's weather problems.

More recently, however, the market had started to cool. Analysts expect Brazil's coffee harvest to rebound because weather has improved and the crop may be entering a naturally stronger production year. A bigger crop would ease the shortage fears that pushed prices to extreme levels.

That is why the latest rally is dividing market watchers.

Andrew Addison, a technical analyst from the Institutional View, says in a Wednesday note that coffee is not merely bouncing in the short term -- it may be starting a lasting rally. Coffee has spent more than five decades moving sideways, and Addison believes that the longer prices stay trapped, the more powerful the eventual breakout can be.

Coffee prices broke above its long-term resistance -- the level where past rallies used to fail -- around $3.35 to $3.40 per pound in late 2024, hitting their highest level since 1977 and setting a record around $4.20 by February 2025.

Following such breakouts, prices often pull back before moving higher again, said Addision. He noted that the recent correction appears to have found support near several important technical levels, meaning the long-term uptrend remains intact. If prices could break above $4.50, it would confirm a major bull market and eventually point to levels above $15, said Addison.

That is a bold call, and investors without a strong heart should be cautious.

Historical analysis from market-research service SentimenTrader shows that when coffee has surged this quickly after recently hitting a major low, returns have often been poor over the next two to six months.

The firm warns that investors should be mindful of a potential "bull trap" -- the strong gains that look like the start of a rally but quickly reverse, leaving late buyers with losses.

"Previous signals suggest the commodity is closer to the end of an uptrend versus the beginning of one," wrote the analysts in a Wednesday note.

For investors, the answer depends on the time frame. Coffee may still have a compelling long-term story if weather continues to threaten supply. But in the near term, the speed of the recent rebound means there is a risk that investors may be arriving too late and get caught in the next pullback.

Retail investors in the U.S. have limited ways to play the coffee trade. They can directly trade ICE Coffee C futures through a brokerage account that allows futures trading, but those contracts are large and highly leveraged.

The iPath Series B Bloomberg Coffee Subindex Total Return ETN, which tracks a single coffee futures contract at a time, was redeemed in 2023. Investors could access the commodity through the Invesco DB Agriculture Fund. But it's is not a pure coffee fund; it holds a basket of agricultural futures.

Write to Evie Liu at evie.liu@barrons.com

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June 18, 2026 16:15 ET (20:15 GMT)

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