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 7.44% within the market over the week of trade leading up to Tuesday 21st. December: to register a net long position of 40,972 lots, which is the equivalent of 11,615,380 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta market will be released later today, due to the holiday observed yesterday, on the 27th December 2021.

The March 2022 to March 2022 contract arbitrage between the London and New York markets narrowed yesterday to register this at 120.32 usc/Lb. This equates to 52.99% 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 decrease by 537 bags yesterday, to register these stocks at 1,546,856 bags, with 95.97% of these certified stocks being held in Europe at a total of 1,484,540 bags and the remaining 4.03% being held in the USA at a total 62,316 bags. Of this, a total 707,739 bags, or 45.75% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.26% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 6,700 bags pending grading on the day.

It was a mixed day on the commodity markets yesterday, the Corn, Soybean and Palladium markets ended the day on a firmer note, the Gold market remained unchanged on the day, while the Sugar, New York Arabica Coffee, Cocoa, Wheat, Gold and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.343 Sterling, at 1.133 the Euro and with the US Dollar buying 5.625 Brazil Real.

The New York market trading solo for the day yesterday opened on a modest near to par firmer note. The market was seen to attract a degree of selling pressure early in the day. This was saw the New York market set on a softer path for the remainder of the morning session. As the afternoon progressed the market continued to drop back further before hitting a floor limiting the losses for the day’s trade. This saw the New York market settle on a negative note within an environment of limited volume of trade.

The London market ended the day on Thursday on a positive note and with 33.33% of the gains of the day intact, while the New York market ended the day yesterday on a negative note and with 89.25% of the losses of the day intact. This softer close for the New York market which was trading solo for the day does little to inspire confidence and one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set in New York yesterday and in London on Thursday, as follows:

LONDON ROBUSTA US$/MT NEW YORK USC/LB.
Close: 23/12/2021                                        Close: 27/12/2021

MAR 2353 + 14       MAR 227.05 – 4.15
MAY 2301 + 7         MAY 227.10 – 4.00
JUL 2285 + 2            JUL 226.55 – 3.85
SEP 2282 – 3           SEP 225.85 – 3.60
NOV 2284 – 2          DEC 224.45 – 3.40
JAN 2284 – 6          MAR 223.95 – 3.30
MAR 2279 – 6         MAY 223.50 – 3.25
MAY 2272 – 6         JUL 222.80 – 3.20