Coffee Market Report

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector raise their net long position by 89.29% within the market over the week of trade leading up to Tuesday 27th. April: to register a net long position of 33,565 lots, which is the equivalent of 9,515,529 bags. This net long position has most likely been trimmed, following the period of overall mixed but softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market switch their net short position to a new net long position within the market over the week of trade leading up to Tuesday 27th April; to register a new net long position of 10,059 Lots which is the equivalent of 1,676,500 bags. This new net long position has most likely registered a narrow increase, following the period of mixed trade that has since followed.

The Indonesian government trade data from Sumatra, which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of April were 81,388 bags or 29.61% lower than the same month last year, at a total of 193,460 bags. This contributes to the islands cumulative robusta coffee exports for the first seven months of the October 2020 to September 2021 coffee year to be 501,073 bags or 25.83% lower than the same period in the previous year, at a total of 1,439,010 bags.

The July-to-July contract arbitrage between the London and New York markets narrowed on Friday; to register this at 75.41 usc/Lb. This equates to 53.31% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 13,870 bags on Friday, to register these stocks at 1,936,685 bags, with 95.21% of these certified stocks being held in Europe at a total of 1,843,802 bags and the remaining 4.79% being held in the USA at a total 92,883 bags. Of this, a total 988,280 bags, or 51.03% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.25% of these certified coffees, originating from Honduras. There was meanwhile a smaller in number 13,190 bags decrease to the number of bags pending grading to the exchange; to register these pending grading stocks at 103,396 bags.

It was a mixed day on the commodity markets on Friday, with an increase in investor and consumer confidence in the state of the US economy, the US Dollar firmed on the day. It was a positive day for Corn, Wheat, and Soybean, Sugar and Palladium markets, Platinum remained unchanged on the day, and a softer day for Oil, Coffee, Cocoa, Gold and Silver markets on Friday. The day starts with the U.S. Dollar trading at 1.381 Sterling, at 1.202 the Euro and with the US Dollar buying 5.437 Brazil Real.

The New York and London markets started the day on Friday trading on a modest firmer note, the markets quickly gained momentum to see both the New York and the London markets trend firmer for the remainder of the morning session. As the afternoon progressed the markets, buoyed by some degree of buying support hit a ceiling limiting the gains for the day. New York and London markets slipped back from the highs of the day to see both the markets set on a softer path for the remainder of the day’s trade. The New York market fell back to settle in negative territory on a softer note for the day, while the London market followed suit albeit in a more sedate manner to see the market settle on a modest close to par, positive note for the day.

The London market ended the day on a modest close to par positive note and with 14% of the earlier gains the day intact, while the New York market ended the day on a negative note and with 75% of the earlier losses of the day intact. This mixed close does little to inspire confidence with the New York market settling near to the lows of the day, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                             NEW YORK USC/LB.
 
JUL 1456 + 4                                                           JUL 141.45 – 1.55
SEP 1479 + 4                                                           SEP 143.40 – 1.50
NOV 1497 + 5                                                         DEC 145.70 – 1.40
JAN 1510 + 3                                                          MAR 147.75 – 1.25
MAR 1524 + 4                                                        MAY 148.45 – 1.20
MAY 1540 + 4                                                        JUL 148.80 – 1.10
JUL 1556 + 4                                                          SEP 148.95 – 1.05
SEP 1570 + 4                                                          DEC 149.15 – 1.00