The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund decrease their net long position by 17.41% within this market over the week of trade leading up to Tuesday 9th. May 2023; to register a new net long position at 26,434 Lots. The longer term in nature Index Fund sector of this market increased their net long position by 5.86% within the market, to register a new net long position of 59,969 Lots on the day.

Over the same week, the Non-Commercial Speculative decreased their net long position by 30.79% within the market over the week of trade leading to Tuesday 9th. May 2023: to register a new net long position of 11,904 lots, which is the equivalent of 3,374,731 bags. This net long position has most likely been little decreased further following the period of mixed but overall softer trade that has since followed.

The respected United States Department of Agriculture USDA Global Agricultural Information Network have revised their estimate for the Guatemalan coffee crop that is made up of primarily washed arabica coffee over the current October 2022 to September 2023 coffee year down by 6.70% to now reach a total of 3.48 million bags, this reported decline in production as a result excessive rain during the flowering season.

The report further estimates that production for the coming October 2023 to September 2024 coffee year, will remain steady, at an estimated at 3.44 million bags, of which the report goes on to estimate 3.15 million bags will be exported to consumer markets from the coming crop harvest. The year-on-year carryover stocks from the current October 2022 to September 2023 into the new October 2023 to September 2024 coffee year are seen to have been depleted and are put at a relatively low 12,000 bags ahead of the new harvest to come. This new harvest traditionally begins around October each year, in the lower lying areas, to pick up pace as the cooler higher areas start harvest toward the end of the year.

The USDA report has revised their estimate for Guatemala domestic annual consumption over the current coffee year meanwhile, to be 4.17% higher than the previous estimate at a total of 625,000 bags, consisting of both instant coffee soluble imports as well as roast and ground product, with the report citing year on year growth, albeit from a low base, of out of home roast coffee consumption.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,959 bags yesterday, to register these stocks at 642,776 bags, with 97.30% of these certified stocks being held in, Europe at a total of 625,446 bags and the remaining 2.70% being held in the USA at a total 17,330. Of this, a total 249,357 bags, or 38.79% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 57.41% of these certified coffees, originating from Honduras. There was meanwhile a no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

The July 2023 to July 2023 contract arbitrage between the London and New York markets widened yesterday to register this at 76.54 usc/Lb. This equates to 40.41% price discount for the London Robusta coffee market. This wide arbitrage may be viewed by price sensitive roasters as an attractive alternative discount for Robusta against the comparatively higher value arabica coffee.

It was a firmer day on the commodity markets yesterday, with the US Dollar falling back from five-week highs, with focus turning to the US Federal Reserve monetary policy committee for guidance on interest rate direction. The Coffee, Sugar, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Cocoa market ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.253 Sterling, at 1.089 the Euro and with the US Dollar buying 4.889 Brazil Real.

The New York and London markets started the day yesterday trading to the north of par on firmer notes respectively. During the early morning session, the New York market tracked upward, with the London market following suit to likewise set a positive track through the morning. As the afternoon progressed, the New York market buoyed by buy stops, with speculative buyers active, assisted a continuation of upward momentum which continued to build during the session. During the mid-afternoon session both the New York and London markets encountered some selling pressure to drop back from the earlier highs, this pressure was short lived as the markets found support during the late afternoon session to gain momentum. The New York market was capped briefly during the late session to settle on a firmer note at the close, maintaining most of the earlier gains, while the London market followed suit to also settle on a positive note, near to the highs of the day at the close.

The London market ended the day on a positive note with 75.68% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive modest note with 95.62% of the earlier gains of the day intact. This very firm close for the markets, with both the New York and London markets tracking upward throughout the session to settle near to the highs of the day, might 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.

JUL     2488 + 56                                      JUL    189.40 + 6.55
SEP     2464 + 55                                      SEP    186.75 + 6.10
NOV   2426 + 52                                      DEC   184.75 + 5.95
JAN    2397 + 49                                      MAR  184.50 + 5.75
MAR  2378 + 48                                      MAY  184.80 + 5.65
MAY  2367 + 49                                      JUL    185.20 + 5.55
JUL    2354 + 52                                      SEP    185.80 + 5.50
SEP    2338 + 46                                      DEC   186.00 + 5.35