Premium on the Edge: One Rain Week to Move Arabica
Where Arabica Could Land Over the Next 7 Days
Reference (Today, Oct 14): Front-month Arabica (ICE KC) is trading around 401.9 ¢/lb = 4.019 $/lb = 8.86 $/kg.
Weather setup: After a dry start to October, Brazil’s Southeast is entering a mid-month front passage with thunderstorms and meaningful rainfall potential across the coastal belt and into Minas Gerais. This keeps the “weather-premium” narrative front and center for near-term pricing.
Download chart (PNG) • Download data (CSV)
7-Day Scenario Map (USD/kg)
Scenario Weather realization Indicative 7-day landing zone* What it implies A — Mild Mid-October rains broadly verify; soil moisture begins to recover in key Minas sub-regions 9.10 – 9.35 $/kg (≈ 4.17–4.26 $/lb) Risk premium eases; market stabilizes higher but orderly B — Mid Patchy/uneven rains; soil stress lingers in parts of the belt ~9.70 $/kg (≈ 4.42 $/lb) Risk premium persists; choppier upside C — Severe Rains under-deliver; meaningful moisture deficit persists ~10.20 $/kg (≈ 4.63 $/lb) Supply-shock premium; impulsive moves possible
*Projected path from today’s 8.86 $/kg; see chart for the smooth trajectory toward each target band.
Rule of thumb for translation: every +1 ¢/lb ≈ +$0.022 /kg (≈ +$1.32 /60-kg bag, ≈ +$22 /t).
What to Watch Daily (execution > speculation)
Accumulated rainfall & soil-moisture signals for BH / Varginha / Patos de Minas.
Port operations & weather windows at Santos (squalls and high winds can create 0.5–3 day disruptions).
Freight & insurance quotes to Jebel Ali; container slot availability.
FX: USD vs BRL and AED; pass-through into landed cost.
Physical Buyer Playbook (no futures required)
Staggered purchasing (2–3 tranches)
Tranche 1: Near today’s reference (8.85–8.95 $/kg) to secure base volume.
Tranche 2: After the mid-month rain check (tilt A if rains verify; lean A/B if patchy).
Tranche 3: End-week, conditional on soil-moisture follow-through and port conditions.
Diversify origin risk: Pair Brazil/Colombia Arabicas with Robusta (VN/ID/UG) to backfill volume if any origin underperforms.
Contract hygiene: Weather contingency, PSI/SGS inspection, flexible laycan, and Price-on-Arrival terms so client pricing reflects realized logistics and FX.
Bottom Line
Today: ~8.86 $/kg sits just above the $4.00/lb reference—below the Scenario-A band, leaving upside headroom if rains disappoint.
Base case bias: Scenario A if mid-October rains verify; A/B if distribution is uneven; C only if rainfall meaningfully under-delivers across the belt.
Tactics: Pace buys, keep laycan flexible, and let the rainfall data guide second/third tranches.
Chart (PNG) shows the 7-day glide paths from today’s level toward each scenario band; CSV includes the daily projections in USD/kg for easy embedding.
