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 5.59% within the market over the week of trade leading to Tuesday 3rd. May 2022: to register a net long position of 21,858 lots, which is the equivalent of 6,196,646 bags. This net long position has most likely been little decreased following the period of softer trade that has since followed.
The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of April have registered 25.40% lower from the previous month, at 2,624,183 bags. This number is proving to be slightly lower than the 2.83 million bags that had been initially forecast for the month’s coffee exports. This sees the cumulative export performance for the first seven months of the current October 2021 to September 2022 coffee year in Vietnam, the largest producer of robusta coffee at 2,468,384 bags or 16.47% higher than the same period in the previous year, at a total 17,453,867 bags.
The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first four months of the 2022 calendar year, is reported at 57.10%% higher than the same period in the previous year, at a total of approximately 1.70 Billion US Dollars.
The July 2022 to July 2022 contract arbitrage between the London and New York markets narrowed on Friday to register this at 115.97 usc/Lb. This equates to 55.11% 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 remain unchanged on Friday, to register these stocks at 1,121,597 bags, with 95.53% of these certified stocks being held in Europe at a total of 1,071,488 bags and the remaining 4.47% being held in the USA at a total 50,109. Of this, a total 573,266 bags, or 51.12% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 40.54% of these certified coffees, originating from Honduras. There was likewise no change to the number of bags pending grading to the exchange; to register 25,230 bags pending grading on the day.
It was a softer day on the commodity markets on Friday, as the greater commodity basket saw widespread losses for the third consecutive trading day, with prospects of further rate increases in the USA the driving force behind the market sentiment. The Sugar market ended the day on a positive note, while the Coffee, Cocoa, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.228 Sterling, at 1.050 the Euro and with the US Dollar buying 5.078 Brazil Real.
The New York market started the day on Friday trading on a modest near to par softer note, while the London market started the day trading on firmer note. Both markets oscillated around par for the remainder of the morning session. During the Mid-morning session, the markets encountered resistance to drop back from the early modest highs of the day and be seen to be set on a softer path for the remainder of morning session. As the afternoon progressed the New York market attracted a degree of long liquidation pressure to see the market trend softer for the remainder of the afternoon session. The London market followed suit. The late afternoon session saw New York market continue to accentuate the losses for the day. This saw the market settle on a very soft note, near to the lows of the day at the close. While the London market followed the trend to likewise settle on a softer note at the close.
The London market ended the day on a negative note with 88.33% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 93.79% of the earlier losses of the day intact. This follow through softer close for the markets does little to indicate direction and with both the New York and the London markets settling near to the lows of the day, one might think that the markets may be pressured for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JUL 2083 – 53 JUL 210.45 – 6.80
SEP 2079 – 52 SEP 210.45 – 6.75
NOV 2072 – 50 DEC 210.10 – 6.65
JAN 2063 – 50 MAR 209.35 – 6.60
MAR 2056 – 49 MAY 208.35 – 6.60
MAY 2051 – 49 JUL 206.75 – 6.50
JUL 2049 – 50 SEP 204.45 – 6.40
SEP 2044 – 50 DEC 201.95 – 6.40
