The illustration above reflects Mr. Roemer’s view in October of 2025 that Brazil’s coffee production would rebound and that we would enter a longer-term bear market.
Following back-to-back droughts and frost scares from 2023-2024 with surging coffee and cocoa prices, the coffee market fell back to earth. While some folks have felt that Brazil’s record crop could mean prices below $2 per pound, we have disagreed. These are the same traders who, at $3.50/lb. last year, were still bullish. They did not anticipate that a weak La Niña at the time would increase (not decrease) global coffee supplies.
Trade tariffs (the US war on Iran aside) had created incredible market volatility, and when Brazil’s record crop hit the market, prices fell below $2.50 a couple of weeks ago. Since that time, our view has been that disease issues from too much rain would hit key areas of Brazil. This caused us to recommend some cautiously bullish trade strategies for our subscribers. Coffee prices have since rallied 10% in the last few weeks.
To find out more about our global coffee weather forecast and market outlook, please upgrade below. (If you are already a Climatelligence subscriber, you can access our full report here.
More wet weather is coming for Brazil’s coffee crop – How El Niño may affect prices
Brazil’s coffee shifted from record-crop optimism to supply-risk concern.
Early on, traders expected a big 2025/26 Brazilian crop. This was because Arabica was in a favorable biennial cycle, and Robusta output was looking strong. That raised the hopes that global coffee supplies would loosen.
By June, the worry changed from too little rain to too much rain.Wet, cooler weather slowed harvesting, delayed ripening, limited fieldwork, and raised fears about bean quality.
We alerted our subscribers to this two weeks ago… and that it was likely that “the lows were in” for coffee prices.
Map Source: WeatherBELL
The rain also increased concern about fungal disease and pest pressure, including leaf rust, cercospora, and coffee borer issues.
Because global coffee inventories were already tight, even a modest threat to Brazil’s harvest triggered a strong market reaction.
The core narrative became:
→ big crop expected
→ weather damage trims potential
→ June rains threaten harvest pace and quality
→ prices rise on renewed supply fears.
We looked for a return of wet weather for the remainder of June to cause additional new concerns for Brazilian coffee.
So… what about a longer view of coffee’s price? Well, just looking at El Niño events below, we can see how prices tend to go higher. Although Jim sees no frost potential for Brazil, a return of wet weather means prices should trend higher heading into July.
Image Source: WeatherWealth Newsletter
We appreciate your interest and look forward to helping you gain a better understanding of the powerful connection between weather and global commodity markets.
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Jim Roemer, Scott Mathews, and the Best Weather Team
Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He is also a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA-registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he commands a unique standing among advisors in the commodity risk management industry.
After rallying to near historic high prices a year ago, you may have had some relief at your favorite coffee shop recently: That precious cup of your favorite cappuccino or espresso has dropped a bit in price (Well, at least it costs your coffee shop less to buy it… your cost is between you and your barista.)
Why? The end of Brazil’s multi-year drought.
Jim Roemer nailed the coffee price crash earlier this year (early 2026) because he foresaw a massive supply rebound coming from healthy Brazilian trees.
However, the plot has twisted in June 2026: unexpected heavy rains will soon soak the harvest, threatening to lower the quality of the record Brazilian coffee bean harvest.
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Anyway, Here is the breakdown of this coffee market drama for novice traders and weather geeks.
Part 1: The “Party Pooper” Prediction (Why Prices Collapsed)
Imagine the coffee market earlier this year was a balloon inflated by fear—fear that Brazil’s trees were still thirsty and damaged from past droughts. Jim Roemer popped that balloon.
· The Call: Starting late 2025 and into 2026, Roemer predicted a “bear market” (prices going down).
· The Reason: He saw that the coffee trees in Brazil had recovered beautifully thanks to “timely rains” earlier in the growing season. The trees were lush, green, and loaded with coffee cherries.
· The Result: Traders realized there was no shortage. The “fear premium” vanished, and prices dropped by roughly 30% as the market braced for a huge flood of beans to hit the warehouses.
Part 2: The “Soggy Plot Twist” (Why Wet June Weather is Bad)
Just as the “Bears” (traders betting on low prices) were celebrating, Mother Nature threw a curveball. It is currently June 2026—prime harvest time in Brazil—and the forecast has turned unexpectedly wet.
For a coffee farmer, rain is great for growing but disastrous for harvesting. Here is why a wet mid-to-late June is a nightmare:
· The “Gremlin” Effect: You simply cannot harvest coffee in the rain. Machines get stuck in the mud, and wet cherries are harder to pick, causing immediate harvest delays.
· The Mold Monster: Coffee cherries need to dry out in the sun after picking. If it rains on them while they are drying on patios (a common method in Brazil), they can ferment, rot, or get moldy. This ruins the flavor, turning “specialty grade” coffee into “cheap filler” or unsellable trash.
· The Supply Squeeze: Traders were expecting those millions of bags of coffee to arrive now. The rain delays the trucks and ships, creating a sudden, short-term shortage that sends prices spiking back up.
How do We do This?
Basically, we use teleconnections (not just standard weather forecast models) to make specialized global forecasts for farmers, producers, and commodity traders in multiple markets. For example, two weeks ago, we began using these three teleconnections to predict what may well be one of the wettest second-half of June periods in recent memory in northern Brazil.
There is a developing El Niño, a positive “AAO” (Antarctic Oscillation) over the South Pole, where the polar vortex remains stationary, and there is the likelihood for above-average surface temperatures in the Indian Ocean.
It’s Your Move!
If you would like to find out about a new, inexpensive commodity-weather service coming with stories like this and for many other markets, please sign up here: climatelligence.substack.com
Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He is also a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA-registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he commands a unique standing among advisors in the commodity risk management industry.
For five months, our WeatherWealth newsletter has predicted a rebound in global coffee production. While periods of dry weather hit some key Northern Brazil coffee areas in October, it has not been hot. Since then, timely rains have hit most key coffee regions.
Also, two typhoons hit Vietnam’s coffee production regions during their harvest in November. Nevertheless, other than some short-term harvest delays back then, any major downgrade to the Vietnam crop is unlikely.
Judy Ganes saw firsthand what was happening in Vietnam a month ago, and the exaggeration by some analysts about major damage to the crop there. Check out her site to receive the best “soft commodity” information. It is well worth a subscription to her service.
This video by StoneX confirms (more or less) what I predicted. With an on-cycle coffee crop year and generally decent (not always perfect) weather in Brazil, any major bull market in coffee in 2026 is unlikely.
This longer-term and potentially bearish philosophy assumes good weather and no frost or wet weather harvest “in the cards” during the May-August time frame in Brazil. Could things change?
I keep coffee traders and producers around the world “abreast” of the fundamental factors affecting coffee and update weather forecasts, often before the crowd realizes what is happening.
The Indian Ocean Dipole (IOD) is a climate phenomenon affecting the Indian Ocean. During a positive phase, warmth is pushed to the Western part of that body of water, while cold deep waters are brought up to the surface in the eastern end of the Indian Ocean. This pattern is reversed during the negative phase of the IOD. It is also known as the Indian Niño, as it draws similarity with the El-Niño Southern Oscillation (ENSO).
What are we looking at?
The plot tracks the conditions in the Indian Ocean, showing the phase of the IOD both now and in the past. Right now we are in a negative phase.
When the value of the time series is positive (red shading), the warm phase of the IOD is present with higher sea level in the western Indian Ocean and lower sea level in the eastern Indian Ocean.
When the value is negative (blue shading on graph above), the cool phase of the IOD is present with lower sea level in the western Indian Ocean and higher sea level in the eastern Indian Ocean. This is what we have today.
Why is it important in commodity trading?
The IOD influences tropical commodities in Africa, Australia and Southeast Asia the most.
During the positive phase of the IOD, the high temperatures along the coast of Africa cause heavy rains and droughts in Australia.
During a negative phase the high temperatures and rainfall patterns are reversed. The sea-level changes associated with the IOD can also lead to increased threats of coastal flooding and associated impacts. However, for west Africa, a negative IOD phase coupled with an El Niño can bring bull markets for cocoa with dry spring and summers often occurring affecting the main crops in Ivory Coast and Ghana.
Presently, we have an El Niño neutral situation and a developing negative Indian Dipole. Hence, the situation is a bit confusing, but could portend a decent (not great) main cocoa crop and possibly take the steam out of the recent two year bull market.
Source: Jim Roemer (Climatepredict software): “If there was an El Niñno in 2025, which there is not, drier weather and a potential bull market would occur this summer“
The negative phase of the IOD brings about the opposite conditions of a positive IOD, with warmer water and greater precipitation in the eastern Indian Ocean, and cooler and drier conditions in the west.
The IOD also affects the strength of monsoons over the Indian subcontinent. This is what we have presently: A negative Indian Ocean Dipole, whose effects should be for a general good monsoon in India that tends to be bearish commodities such as sugar.
The impact of monsoons on Indian farmers
A majority of India’s GDP is dependent on the growth and production of agriculture. India is an agrarian nation, with more than 50% of the population earning their livelihood in agriculture.
The monsoon is the most important season for farmers in this country. A majority of Indian agricultural land is watered by the southwest monsoon. Field crops such as sugar, cotton, wheat, rice, and legumes are staple foods in India. They require strong rainfall in order to grow.
Does the Indian Monsoon affect summer corn belt weather?
There is only a little evidence that the Indian monsoon has a significant or consistent effect on Midwest Corn Belt weather. The Midwest’s weather and crop yields are primarily influenced by local factors such as precipitation recycling, land use, and groundwater, as well as larger-scale patterns like El Niño and La Niña. While global weather systems can sometimes interact, and changes in major monsoon systems may have indirect or minor effects on global atmospheric circulation, any direct linkage between the Indian monsoon and Midwest Corn Belt weather is not established in the search results.
You can see on my ClimatePredict program below (available to subscribers to WeatherWealth newsletter), there is a slight (-.31) correlation of the Indian Dipole and July corn belt rainfall.
In other words, a negative IOD, which is negatively correlated, suggests a slight chance for above normal corn belt rains (two negatives = a positive value). Notice, however, the correlation is much higher with El Niño/La Niña (+1.01). An El Niño (warm ocean signal) is positively correlated with corn belt rain. In other words wet, while La Niña is the opposite– a dry bullish signal like 2011 and 2012. Right now, we have mixed “El Niño neutral” conditions.
July temperature tends to to be hotter than normal for the Midwest corn belt with a negative IOD. Here too, the correlation is much weaker with the IOD than El Niño/La Niña and other teleconnections
Conclusion:
It promises to be another wild summer for the grain market, as the potential for hot summer weather will increase market volatility. The Indian Ocean Dipole being negative and an “El Niño neutral” event does suggest that most (not all) of the Midwest grain belt should have decent summer rains.
With respect to soft commodities, potential crop problems may continue for parts of West African cocoa, while Robusta coffee and sugar crops recover in Southeast Asia. This could keep these two commodities in a more longer term bear market. Of course, the behavior of the Brazilian Real, US dollar and crops in various locations will also play a role.
HELPING YOU MAKE THE BEST INVESTMENT DECISIONS BASED ON THE WEATHER
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