Coffee Market Report
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of April was 60,000 bags or 7.41% lower than the same month last year, at a total of 750,000 bags. This has contributed to the country’s cumulative coffee exports for the first seven months of the present October 2021 to September 2022 coffee year to be 1,405,000 bags or 16.74% lower than the same period in the previous coffee year, at a total of 6,988,000 bags.
The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of April were 190,000 bags or 18.36% lower than the same month last year, at a total of 845,000 bags. This has contributed to the country’s cumulative coffee exports for the first seven months of the present October 2021 to September 2022 coffee year to be 832,000 bags or 10.21% lower than the same period in the previous coffee year, at a total of 7,314,000 bags. There are concerns being raised by generally respected forecasters that the coffee year Colombia crop and the current Mitaca harvest that is set to start in earnest soon, is not looking to come in lowever, than earlier anticipated, due to excessive rains over the cherry development phase as this country continues to be impacted by high rainfall that is thought to be brought about by the second La Nina weather event in two years.
The Coffee Exporters Association in Brazil Cecafé have reported that the country's green coffee exports for the month of March were 5.83% lower than the same month last year, to total 3.27 million bags, this number made up of 3.14 million bags of arabica coffee up by a marginal 0.73% from the same month last year and 123,437 bags of Conilon robusta coffee down 64.56% from the same month last year.
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first nine months of the current July 2021 to June 2022 Brazil coffee year, to be 23.74% lower, overall, when compared to the same time in the previous coffee year, at a total of 24.87 million bags. These figures are reported versus the Brazil bumper crop, that is estimated to have come in at a record 72 million bags in the July 2020 to June 2021 coffee year. When comparing the export performance from Brazil against the last, similar lower Brazil export year in 2019, the export performance is 16.37% higher against the same month in March 2020 and 2.69% lower, for the cumulative nine months of the 2019/20 lower bearing cycle.
Within Brazil, the Conilon robusta crop harvest is underway, while the arabica regions are due to start the harvest in the coming months, traditionally during the month of June, one would anticipate that so long as there are no unforeseen climatic events and that the weather remains conducive, the potential of the Brazil 2022/23 coffee production may reach the currently forecast median at 64 million bags.
The July 2022 to July 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 123.87 usc/Lb. This equates to 56.10% 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 increase by 7,629 bags yesterday, to register these stocks at 1,122,838 bags, with 95.54% of these certified stocks being held in Europe at a total of 1,072,729 bags and the remaining 4.46% being held in the USA at a total 50,109. Of this, a total 573,266 bags, or 51.06% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 40.57% of these certified coffees, originating from Honduras. There was meanwhile a 2,280 bags decrease to the number of bags pending grading to the exchange; to register 22,520 bags pending grading on the day.
It was a firmer day on the commodity markets yesterday, with the US Dollar losing ground against a basket of other currencies, after comments made by the US Federal Reserve indicated an imminent interest rate hike as a tool to curb soaring inflation. The Cocoa, Coffee, Corn, Soybean, Wheat, Gold, Silver and Platinum markets ended the day on a positive note, the Sugar and Palladium markets remained unchanged on the day, while the Cocoa market ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.254 Sterling, at 1.061 the Euro and with the US Dollar buying 4.920 Brazil Real.
The New York and London markets started the day yesterday trading on a modest firmer note, both markets would continue to trend in a positive direction for the remainder of the morning session. As the afternoon progressed the firmer trend built as more activity increased in New York. This momentum carried into the early afternoon as buy stops were triggered to accentuate the gains for the day. The late afternoon session saw the New York market drop back and trend towards par briefly before gaining momentum with a degree of speculative short covering buoying the market upwards. The late afternoon session saw the London market follow suit, albeit in a more sedate manner. The New York market continued on its upward momentum path before being capped briefly very late in the day. This saw the New York market settle near to the highs of the day on a firm note, while the London market followed to also settle on a firmer note at the close.
The London market ended the day on a positive note with 88% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 75% of the earlier gains of the day intact. This follow through firmer close, might inspire some degree of confidence and momentum to possibly set the markets for a follow through steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JUL 2137 + 22 JUL 220.80 + 2.85
SEP 2133 + 19 SEP 220.75 + 2.95
NOV 2127 + 15 DEC 220.30 + 3.00
JAN 2120 + 13 MAR 219.45 + 3.00
MAR 2114 + 11 MAY 218.50 + 3.00
MAY 2110 + 10 JUL 216.80 + 3.00
JUL 2109 + 10 SEP 214.40 + 3.00
SEP 2104 + 10 DEC 211.95 + 3.05
