Coffee Market Report

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector cut their net long position by 6.79% within the market over the week of trade leading up to Tuesday 14th. September: to register a net long position of 34,031 lots, which is the equivalent of 9,647,638 bags. This net long position has most likely been little changed following the period of softer trade but overall flat 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 raise their net long position by 6.19% within the market over the week of trade leading up to Tuesday 14th. September: to register a new net long position of 30,222 Lots which is the equivalent of 5,037,000 bags. This net long position has most likely been increased slightly following the period of firmer trade that has since followed.

The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of August were 181,307 bags or 34.89% higher than the same month last year, at a total of 700,990 bags. Uganda Robusta exports registered a 38.99% increase when compared to the same month last year, to total 636,458 bags, whereas Arabica exports registered a likewise increase by 4.44% to a total 64,532 bags exported in August this year. The UCDA likewise report that the cumulative exports for the first eleven months of the October 2020 to September 2021 coffee year are 1,054,726 bags or 21.73% higher than the same period in the previous year, at a total of 5,909,115 bags.

The November-to-December contract arbitrage between the London and New York markets narrowed on Friday to register this at 88.83 usc/Lb. This equates to 47.66% 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 remain unchanged on Friday, to register these stocks at 2,164,372 bags, with 94.14% of these certified stocks being held in Europe at a total of 2,037,588 bags and the remaining 5.86% being held in the USA at a total 126,784 bags. Of this, a total 1,155,385 bags, or 53.38% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.13% of these certified coffees, originating from Honduras. There was meanwhile a larger in number 3,200 bags decrease to the number of bags pending grading to the exchange; to register no grading stocks.

It was a softer day on the commodity markets on Friday, the US Dollar continued to gain ground against a basket of other currencies. A stronger US Dollar is seen to be a bearish factor for many of the US Dollar based commodity markets when trading in other currencies. The Cocoa, London Robusta Coffee, Wheat and Platinum markets ended the day on a positive note, while the Sugar, New York Arabica Coffee, Corn, Soybean, Gold, Silver and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.371 Sterling, at 1.174 the Euro and with the US Dollar buying 5.289 Brazil Real.

The New York and London markets started the day on Friday trading close to par on a modest firm note. Both the New York and London markets quickly dropped back to see the markets oscillate to the south of par for the remainder of the morning session. As the afternoon progressed the markets gained a degree of buying support which buoyed the markets in a firmer direction. The New York market would hit a ceiling limiting the gains for the day to see the market drop back set on a softer path for the remainder of the day’s trade, while the London market continued to gain momentum to see the market settle near to the highs of the day at the close. The New York market settled on a softer note at the close.

The London market ended the day on a positive note and with 93.62% of the gains of the day intact, while the New York market ended the day on a negative note and with 50% of the losses of the day intact. This mixed close does little to indicate direction, albeit that the New York market recovered half of the earlier in the day losses to settle on a softer note, one might think the markets are due for a hesitant start to early trade today, against the prices set on Friday, as follows:

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

NOV 2151 + 44                                                          DEC 186.40 – 1.75
JAN 2121 + 31                                                           MAR 189.20 – 1.70
MAR 2057 + 20                                                         MAY 190.40 – 1.70
MAY 2030 + 16                                                         JUL 191.15 – 1.65
JUL 2021 + 13                                                           SEP 191.65 – 1.65
SEP 2018 + 11                                                           DEC 192.25 – 1.70
NOV 2022 + 11                                                         MAR 192.85 – 1.70
JAN 2029 + 11                                                          MAY 193.35 – 1.75