Coffee Market Report

The September 2022 to September 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 123.66 usc/Lb. This equates to 58% 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 1,538 bags on yesterday, to register these stocks at 703,310 bags, with 92.02% of these certified stocks being held in Europe at a total of 647,211 bags and the remaining 7.98% being held in the USA at a total 56,099 Of this, a total 249,000 bags, or 35.40% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 52.50% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

It was a mixed day on the commodity markets yesterday, the energy markets losing ground as supply discussions continue within the European Union, and within the global economy inflation concerns continue to underpin sentiment. The US Dollar regained ground against a basket of other currencies on the day. The next round of US Federal Reserve Bank meetings is set to take place mid this week. It was a positive finish to the day for the Wheat, Corn, Soybean, Coffee, Cocoa, Gold, and Silver markets, while the Sugar, Platinum and Palladium ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.205 Sterling, at 1.015 the Euro, the US Dollar buying 5.351 Brazil Real.

The coffee markets started the day in a positive range in light volume, speculative buying support provided a boost to the early morning trade. The New York market capped early gains met by selling activity and a rapid drop back to par, where underlying buyer activity gathered sufficient upward momentum, to trigger stops along the way. The London market followed suit with limited volume throughout the day, pushing through to negative territory, to recover most of the lost ground by mid-session. The New York market tracked higher through midsession, and a higher low emerged to set the floor for the day in positive territory. The London market continued in light volume toward the latter half of the day breaking through par as the day drew to a close. The New York arabica market reflecting to some degree a firmer Brazil Real by the afternoon, in combination with the overall uncertain macro environment, the range in New York flattened out toward the end of the day, to register a close in positive territory, at the higher end of the range for the day. The London market registered a recovery back to positive territory to be near to unchanged on the day.

The London market ended the day on a positive note with 58.80% of the earlier gains of the day intact, while the New York market ended the day on a likewise very positive note with 62.38% of the earlier gains of the day intact. The markets finished the day yesterday near to unchanged in London and in positive territory in New York, against prices set yesterday, as follows:

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

SEP 1974 + 1                                                     SEP 213.20 + 3.15
NOV 1974 + 2                                                   DEC 209.45 + 3.30
JAN 1955 + 1                                                    MAR 205.45 + 3.25
MAR 1939 Unch                                               MAY 202.90 + 3.20
MAY 1935 + 1                                                   JUL 200.95 + 3.15
JUL 1931 + 1                                                    SEP 199.20 + 3.05
SEP 1927 + 1                                                    DEC 197.55 + 3.15
NOV 1924 + 1                                                  MAR 195.65 + 3.20