Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net long position within this market by 1.06% over the week of trade leading up to Tuesday 25th. January; to register a new net long position 53,647 Lots. Meanwhile the longer term in nature Index Fund sector of this market increase their net long position within the market by 2.72%, to register a net long position of 46,162 Lots on the day.
Over the same week, 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: 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 Ivory Coast, have reported that their coffee exports for the month of December were 48,217 bags or 75.67% lower than the same month last year, at a total of 15,500 bags. This has contributed to their country’s cumulative coffee exports for the first four months of the October 2021 to September 2022 coffee year to be 199,650 bags or 78.34% lower than the same period last year, at a total of 55,200 bags. This modest in comparison export performance is perhaps related to internal dynamics rather than an indication of problems with the new crop, which has been forecast in excess of 1.40 million bags.
The March 2022 to March 2022 contract arbitrage between the London and New York markets widened yesterday to register this 136.44 usc/Lb. This equates to 58.03% 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 68,999 bags yesterday, to register these stocks at 1,218,627 bags, with 95.04% of these certified stocks being held in Europe at a total of 1,158,229 bags and the remaining 4.96% being held in the USA at a total 60,398. Of this, a total 497,258 bags, or 40.80% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 50.76% of these certified coffees, originating from Honduras. There was meanwhile a 4,858 bags decrease to the number of bags pending grading to the exchange; to register 47,920 bags pending grading on the day.
It was a mixed day on the commodity markets yesterday, the leading in influence Oil markets ended the day higher and the US Dollar strengthened against a basket of other currencies. The Cocoa, Soybean Gold, Silver and Platinum markets ended the day on a firmer note, while the Sugar, Coffee, Corn, Wheat and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.345 Sterling, at 1.124 the Euro and with the US Dollar buying 5.304 Brazil Real.
The New York and London markets started the day yesterday trading on a modest near to par firmer note, both markets in weighed by selling pressure early in the day were set on a softer path. The markets would continue to trend softer throughout the remainder of the morning session before setting a floor to limit the losses for the day. As the afternoon progressed, the Brazil Real tracked firmer against the US Dollar, the markets rebounded from the lows of the day to trend firmer into the early afternoon session.
This saw both the New York and London markets carry a degree of momentum through to the close, to recover some of the earlier losses of the day. The New York market was seen to settle on a softer note at the close, with the London market following suit to also settle on a negative note at the close.
The London market ended the day on a negative note with 56.25% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 38.09% of the earlier losses of the day intact. This softer close, with both the New York and London markets recovering some of the earlier losses of the day and with the Brazil Real showing signs of buoyancy one would expect a near to steady start due for early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 2175 – 18 MAR 235.10 – 0.80
MAY 2172 – 12 MAY 235.50 – 0.95
JUL 2161 – 12 JUL 234.60 – 1.00
SEP 2160 – 10 SEP 233.60 – 0.90
NOV 2160 – 8 DEC 231.65 – 0.30
JAN 2159 – 8 MAR 230.15 – 0.25
MAR 2158 – 8 MAY 229.02 + 0.25
MAY 2153 – 8 JUL 227.65 + 1.15
