Brazil’s government food supply and statistics agency CONAB are due to release their first estimate for the July 2023 to June 2024 crop year, later today upon their opening. CONAB have meanwhile reported that Brazilian Coffee producers are forecast to produce a cumulative total 50.90 million bags for the July 2022 to June 2023 crop year. There has been some discussion through this new crop developing meanwhile, around the potential for recovery of the fields subjected to skeletal pruning, following the frost damage in 2021, which could supplement the coming 2023/2024 biennial bearing production cycle. The median average forecast for this next crop following the cherry set in the last months of 2022, has been put somewhere in the region of 63 million bags. With further field surveys currently underway, the government authorities' forecasts, as well as independent crop estimates are anticipated to come to the fore in the weeks ahead.

The Coffee Board of India have reduced their earlier new coffee crop harvest by 550,000 bags or 8.39%, to now forecast a new crop for the present October 2022 to September 2023 coffee year at 6,000,000 bags. This reduction in their new crop expectations being related to the excessive and often damaging rains experienced in the country’s main coffee state of Karnataka during the monsoon season last year. In this respect the Coffee Board foresee that the new robusta coffee crop shall be 6.50% below their earlier forecast, at a total of 4,060,000 bags. While they likewise foresee that the new arabica coffee crop shall be 13.00% below their earlier forecast, at a total of 1,940,000 bags.

The European Coffee Federation, E.C.F. have reported that the port warehouse coffee stocks held within reporting warehouses in Belgium, Germany, France, Italy and Spain, to have registered a 4.02% increase during the month of October 2022 from the same month in the previous year to total 13,857,133 bags at the end of the month. The stocks are reported as 5,292,400 bags robusta coffee, 3,909,050 bags natural arabica coffee (Including Brazil semi-washed) and 4,655,500 bags washed arabica coffee. These stocks do not include the privately held, unreported stocks from the industry, onsite inventory, nor the in-transit bulk container stocks and the stocks being held within non-reporting warehouses throughout Western and Eastern Europe.

The combination of EU27 countries consumption is traditionally put somewhere in the region of approximately 1.06 million bags of coffee a week. An anticipated additional stock level that is not included in the report, when one accounts for the privately held stocks in European consumer countries could contribute to as much as 2 million bags to the reported stocks. An estimate as at the end of October 2022 that European coffee stocks might have been close to the equivalent of fourteen weeks of European roasting demand.

The March 2023 to March 2023 contract arbitrage between the London and New York markets widened yesterday to register this at 68.73 usc/Lb. This equates to 44.34% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 8,307 bags yesterday, to register these stocks at 858,661 bags, with 94.57% of these certified stocks being held in Europe at a total of 812,009 bags and the remaining 5.43% being held in the USA at a total 46,652. Of this, a total 472,013 bags, or 54.97% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.76% of these certified coffees, originating from Honduras. There was meanwhile a 20,160 bags decrease to the number of bags pending grading to the exchange; to register 100,704 bags pending grading on the day.

It was an overall softer day on the commodity markets yesterday, the leading in influence Oil markets lower on the day, while the US Dollar lost further ground against a basket of other currencies. The Coffee and Platinum markets ended the day on a positive note, while the Corn, Sugar, Soybean, Wheat, Gold, Silver and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.233 Sterling, at 1.079 the Euro and with the US Dollar buying 5.186 Brazil Real.

The New York and London markets started the day yesterday trading to the north of par on a modest firmer note. The markets took a firmer track into the early morning session, before being weighed by selling pressure to see the New York and London markets drop back and trend towards par. The markets rebounded off the modest lows of the early morning session, to gain support and trend firmer. This saw the markets track upward as speculative buying support returned to the floor. As the afternoon progressed, the New York and London markets continued to gain momentum to rally late in the day, around the opening of business day in the Americas, to see both markets continue to move in a firmer direction. The upward momentum brought sellers back to the floor at the top of the day, and both New York and London markets hit a ceiling late in the day to limit the sessions gains. The New York market settled near to the highs of the day on a firm note, while the London market dropped back late in the day to settle on a modest near to unchanged firmer note at the close.

The London market ended the day on a modest positive note with 35% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 86.67% of the earlier gains of the day intact. This relatively firmer performance for the markets, which were seen to gain momentum throughout the day to settle on a firmer note at the close, might indicate some degree of confidence and direction to possibly see the markets set for a follow through steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT              NEW YORK USC/LB.

MAR   1902 + 7                                       MAR   155.00 + 3.90
MAY   1870 + 8                                       MAY   155.70 + 3.90
JUL     1845 + 6                                       JUL     156.10 + 3.70
SEP     1824 + 3                                       SEP     156.25+ 3.50
NOV   1809 + 1                                       DEC    156.30 + 3.35
JAN    1803 + 1                                       MAR   156.75 + 3.35
MAR  1801 + 1                                        MAY   157.40 + 3.50
MAY  1807 + 1                                        JUL     157.85 + 3.55