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 cut their net long position within this market by 11.99% over the week of trade leading up to Tuesday 1st March; to register a new net long position 50,826 Lots. Meanwhile the longer term in nature Index Fund sector of this market marginally cut their net long position within the market by 2.71%, to register a net long position of 44,001 Lots on the day.
Over the same week, the Non-Commercial Speculative sector cut their net long position by 13.19% within the market over the week of trade leading up to Tuesday 1st March: to register a net long position of 43,746 lots, which is the equivalent of 12,401,797 bags. This net long position has most likely been decreased further following the period of overall, softer trade that has since followed.
The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of February have registered 14.70% lower from the previous month, at 2,322,850 bags. This number is proving to be slightly higher than the 2.17 million bags that had been initially forecast for the month’s coffee exports. This sees the cumulative export performance for the first five months of the current October 2021 to September 2022 coffee year in Vietnam, the largest producer of robusta coffee at 676,896 bags or 6.36% higher than the same period in the previous year, at a total 11,312,767 bags.
The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first two months of the 2022 calendar year, shall be 65.50% higher than the same period in the previous year, at a total of approximately 823.10 million US Dollars.
The Ivory Coast have reported that their provisional coffee exports for the month of January were 17,850 bags or 84.67% lower than the same month last year, at a total of 3,233 bags. This has contributed to their country’s cumulative coffee exports for the first five months of the October 2021 to September 2022 coffee year to be 217,500 bags or 78.82% lower than the same period last year, at a total of 58,433 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 May 2022 to May 2022 contract arbitrage between the London and New York markets remained unchanged yesterday to register this 131.81 usc/Lb. This equates to 58.79% 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 10,303 bags yesterday, to register these stocks at 992,285 bags, with 94.23% of these certified stocks being held in Europe at a total of 935,046 bags and the remaining 5.77% being held in the USA at a total 57,239. Of this, a total 417,977 bags, or 42.12% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.90% of these certified coffees, originating from Honduras. There was meanwhile 20,160 bags increase to the number of bags pending grading to the exchange; to register 117,404 bags pending grading on the day.
It was a mixed day on the commodity markets yesterday, this after Russian and Ukrainian officials held a third round of ceasefire talks, albeit that no resolution has been reached at this stage. The Sugar, Cocoa, Wheat and Gold markets ended the day on a firmer note, the New York Arabica Coffee market remained unchanged on the day, while the London Robusta Coffee, Corn, Soybean, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.311 Sterling, at 1.086 the Euro and with the US Dollar buying 5.112 Brazil Real.
The New York and London markets started the day yesterday trading on a firmer note, both markets would quickly reverse the trend and attract a degree of selling pressure to see the markets trend softer throughout the morning session, the markets soon hit a floor to limit the losses for the day. The late morning session saw the New York market buoyed by a degree of buying support which saw the market trend very firm into the early afternoon session. As the afternoon progressed the New York market would hit a ceiling limiting the gains for the day, the London market followed suit albeit in a more sedate manner. The markets dropped back from the highs of the day and were seen to settle unchanged from the day before at the close.
The London market ended the day on a modest near to unchanged softer note with 15.79% of the earlier losses of the day intact, while the New York market ended the day unchanged from the previous day. This marginally softer close for the markets might indicate some degree of consolidation as the both the New York and the London markets traded through a large range yesterday before settling near to unchanged from the previous day at the close, one might therefore think that the markets are due for little better than a hesitant start to to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAY 2038 – 3 MAY 224.25 Unch
JUL 2013 + 1 JUL 223.10 + 0.10
SEP 2009 Unch SEP 221.90 – 0.05
NOV 2007 Unch DEC 219.95 – 0.25
JAN 2005 + 1 MAR 218.00 – 0.35
MAR 2003 + 5 MAY 216.55 – 0.35
MAY 2007 + 8 JUL 214.45 – 0.20
JUL 2008 + 11 SEP 211.80 – 0.15
