Coffee Market Report

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net long position by 15.14% within the market over the week of trade leading to Tuesday 21st. June 2022: to register a net long position of 23,787 lots, which is the equivalent of 6,743,509 bags. This net long position has most likely been decreased marginally following the period of mixed but overall softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this decrease their net long position by 3.16% within the market over the week of trade leading up to Tuesday 21st. June 2022: to register a new net long position of 21,572 Lots which is the equivalent of 3,5950,333 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.

The September 2022 to September 2022 contract arbitrage between the London and New York markets narrowed on Friday to register this at 130.54 usc/Lb. This equates to 58.47% 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 13,760 bags on Friday, to register these stocks at 955,661 bags, with 95.30% of these certified stocks being held in Europe at a total of 910,747 bags and the remaining 4.70% being held in the USA at a total 44,914. Of this, a total 442,432 bags, or 46.30% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 44.07% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 2,600 bags pending grading on the day.

It was a firmer day on the commodity markets on Friday, with investors looking at indicators that suggest a potential slowdown in the global economy. The Oil, Corn, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a firmer note, while the Sugar, Coffee, Cocoa and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.229 Sterling, at 1.057 the Euro and with the US Dollar buying 5.242 Brazil Real.

The New York and London markets started the day on Friday trading on a modest near to par firmer note, both markets oscillated around par before gaining momentum early to trend in a firmer direction during the early morning session. This would see the markets encounter 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 project in a negative direction, accentuating 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 in a softer direction.

The London market ended the day on negative note with 89.36% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 85.18% of the earlier losses of the day intact. This follow through softer close for the markets, does little to inspire confidence nor does it indicate direction, one might think that the markets are due for little better than a hesitant follow through start to early trade today, against the prices set on Friday, as follows:

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

SEP 2044 – 42                                            SEP 223.25 – 5.75
NOV 2037 – 39                                          DEC 221.45 – 5.80
JAN 2024 – 34                                           MAR 219.50 – 5.80
MAR 2017 – 30                                         MAY 218.05 – 5.70
MAY 2012 – 27                                         JUL 216.50 – 5.55
JUL 2011 – 25                                           SEP 214.75 – 5.35
SEP 2006 – 22                                           DEC 212.95 – 5.25
NOV 2004 – 20                                         MAR 210.75 – 5.15