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 1.74% within the market over the week of trade leading up to Tuesday 25th. January 2022: to register a net long position of 47,022 lots, which is the equivalent of 13,330,529 bags. This net long position has most likely been little changed following the period of mixed but overall sideways 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 cut their net long position by 11.03% within the market over the week of trade leading up to Tuesday 25th. January 2022: to register a new net long position of 34,385 Lots which is the equivalent of 5,730,833 bags. This net long position has most likely been little changed following the period of mixed but overall sideways trade that has since followed.
With the month of January almost complete and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of January shall be 9% higher than the same month last year, at a total of approximately 2,916,667 bags. This they say, shall result in the countries coffee exports for the first four months of the current October 2021 to September 2022 coffee year to be 0.75% higher than the same period last year, at a total of 7,913,334 bags.
The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the month of January, shall be 40.90% higher than the same month last year, at a total of approximately 395 million US Dollars. One may anticipate a quiet week ahead and slower trade within the interior, as the country observes Tet Lunar New Year celebrations.
One of Brazil’s prominent and respected coffee exporters Comexim has come forth to forecast that the July 2022 to June 2023 Brazil coffee new crop shall be 16.61% or 9 million bags larger than the current July 2021 to June 2022 Brazil coffee crop estimate, to potentially see this new coffee crop come in at 63.20 million bags. The higher estimate is being attributed to the biennially bearing nature of the Brazil coffee crop and the coming July 2022 to June 2023 coffee year, a higher year in the cycle. The report has also forecast that coffee exports to come from the new Brazil crop, is estimated to be 7.33% or 2.80 million bags higher than the previous July 2021 to June 2022 coffee year, at a total of 41 million bags.
There are still some months ahead meanwhile, for the July 2022 to June 2023 Brazil coffee crop to develop toward harvest, with a multitude of new crop forecasts anticipated to still come to the markets. Following on from good rainfall during December and the first half of January, one must presume there is good ground water retention levels, however there continues to be a close watch upon the weather reports out of this leading producer, as the new biennial bearing arabica coffee crop develops on the trees
The March 2022 to March 2022 contract arbitrage between the London and New York markets widened on Friday to register this 136.43 usc/Lb. This equates to 57.83% 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 718 bags on Friday, to register these stocks at 1,287,626 bags, with 95.31% of these certified stocks being held in Europe at a total of 1,227,228 bags and the remaining 4.69% being held in the USA at a total 60,398. Of this, a total 539,478 bags, or 41.89% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 50.12% of these certified coffees, originating from Honduras. There was meanwhile a 23,109 bags increase to the number of bags pending grading to the exchange; to register 52,778 bags pending grading on the day.
It was a mixed day on the commodity markets on Friday, weighed by expectations of a interest rate hike which saw the US Dollar 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, Coffee, Corn, Wheat, Soybean and Palladium markets ended the day on a firmer note, while the Sugar, Gold, Silver and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.341 Sterling, at 1.116 the Euro and with the US Dollar buying 5.367 Brazil Real.
The New York and London markets started the day on Friday trading on a firmer note, with both markets attracting a degree of selling pressure soon after the open to see the markets track softer for the remainder of the morning session. The markets would hit a floor limiting the losses for the day which saw both the New York and London market rebound from the lows of the day and set an upward trend into the afternoon session. As the afternoon progressed the markets continued on this firmer path.
The markets buoyed by buying support continued to trend firmer before hitting a ceiling to limit the gains for the day which saw the markets drop back from the highs of the day. The New York market was seen to settle on a firmer note at the close, while the London market followed suit in a more sedate manner to settle on a near to unchanged close to par positive note.
The London market ended the day on a modest near to unchanged firmer note with 10.53% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 65.81% of the earlier gains of the day intact. This firmer close, albeit that both the New York and the London markets dropped back from the highs of the day, might inspire some degree of follow through confidence to possibly set the markets for a steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 2193 + 2 MAR 235.90 + 3.85
MAY 2184 + 10 MAY 236.45 + 3.80
JUL 2173 + 9 JUL 235.60 + 3.65
SEP 2170 + 9 SEP 234.50 + 3.55
NOV 2168 + 11 DEC 231.95 + 2.80
JAN 2167 + 12 MAR 230.40 + 2.35
MAR 2166 + 12 MAY 228.80 + 1.95
MAY 2161 + 12 JUL 226.50 + 1.40
