Coffee Market Report

The July 2022 to July 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 135.73 usc/Lb. This equates to 58.69% price discount for the London Robusta coffee market. This wide arbitrage may 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 18,267 bags yesterday, to register these stocks at 1,060,498 bags, with 95.64% of these certified stocks being held in Europe at a total of 1,014,289 bags and the remaining 4.36% being held in the USA at a total 46,209. Of this, a total 541,589 bags, or 51.07% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 51.02% of these certified coffees, originating from Honduras. There was meanwhile a 2,600 bags increase to the number of bags pending grading to the exchange; to register 7,800 bags pending grading on the day.

It was an overall softer day on the commodity markets yesterday, with the US Dollar trending firmer against a basket of other commodities, albeit offset by further talks on potential interest rate hikes in the USA. The Coffee, Cocoa and Platinum markets ended the day on a positive note, while the Sugar, Corn, Soybean, Wheat, Gold, Silver and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.258 Sterling, at 1.071 the Euro and with the US Dollar buying 4.731 Brazil Real.

The New York market started the day yesterday trading on a modest near to unchanged softer note, while the London market started the day yesterday trading on a modest firmer note. The markets would oscillate around par for the remainder of the early morning session before being weighed by a degree of selling pressure during the mid-morning session. As the afternoon progressed the markets gained momentum to trade to the north of par, this saw the markets trend firmer with the New York market starting to add more value and quickly trigger buy stops along the way to accentuate the gains for the day. The London market followed suit with the influence the New York market, the markets would hit a ceiling to limit the gains for the day which saw both the New York and London markets drop back from the highs of the day. The New York market was seen to settle on a firmer note, while the London market settled near to unchanged at the close.

The London market ended the day on a modest near to unchanged positive note with 9.91% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 41.86% of the earlier gains of the day intact. This firmer close for the markets, albeit that the New York and London markets dropped back from the earlier highs of the day to settle on modest firmer notes respectively, 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 yesterday, as follows:

LONDON ROBUSTA US$/MT                NEW YORK USC/LB.

JUL 2106 + 1                                             JUL 231.25 + 1.80
SEP 2110 + 4                                             SEP 231.45 + 1.75
NOV 2100 + 11                                         DEC 230.80 + 1.75
JAN 2086 + 14                                          MAR 229.00 + 1.50
MAR 2080 + 16                                        MAY 227.05 + 1.15
MAY 2073 + 17                                        JUL 224.75 + 0.80
JUL 2069 + 15                                          SEP 222.20 + 0.50
SEP 2061 + 13                                          DEC 219.80 + 0.40