Coffee prices experienced a sharp decline for the second consecutive day on Thursday, August 27th, with arabica falling to a 2.5-week low and robusta dropping to a 2-month low. The sell-off was driven by an improved outlook for Brazil’s coffee harvest, which is expected to add more supply to the market, easing prior supply concerns and triggering long liquidation in coffee futures. This shift in sentiment comes as most warehouses in Brazil are no longer accepting new coffee supplies due to limited space, a situation that suggests farmers who had been holding back sales in hopes of higher prices will soon be compelled to sell their stocks. Robusta coffee faced additional downward pressure after ICE robusta coffee inventories jumped to a 9-month high on Tuesday. The price drop marks a significant reversal from earlier in the week. On Tuesday, arabica coffee had posted a 7.5-month high and robusta a 3-week high, propelled by concerns over the slow pace of Brazil’s coffee harvest. However, the narrative has quickly changed as harvest progress accelerates. Brazil’s Cooxupe co-op reported on Wednesday that 87.5% of the harvest was complete as of August 21st, which is up 6 points from the prior week, though still slightly behind the 91.3% recorded a year earlier. Similarly, Safras & Mercado reported on August 14th that the Brazil 2026/27 coffee harvest was 90% completed as of August 12th, a figure that lags behind both last year's pace of 97% and the 5-year average of 94%. Focusing specifically on the arabica crop, Safras & Mercado noted the harvest was 86% complete, which is also behind last year's 95% for the same period. Falling inventories are bullish for arabica coffee prices, as evidenced by ICE arabica coffee inventories falling to a 27-year low of 224,011 bags on Thursday. Conversely, rising inventories are bearish for robusta coffee, as ICE robusta inventories climbed to a 9-month high of 4,943 lots on Tuesday, adding to the downward pressure on that market.