Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market raise their net long position within this market by 25.16% over the week of trade leading up to Tuesday 16th. August; to register a new net long position at 26,621 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 7.52%, to register a net long position of 41,879 Lots on the day.
Over the same week, the Non-Commercial Speculative sector increased their net long position by 17.39% within the market over the week of trade leading up to Tuesday 16th. August: to register a net long position of 18,849 lots, which is the equivalent of 5,343,608 bags. This net long position has most likely been decreased marginally following the period of overall softer trade that that has since followed.
The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of July were 122,907 bags or 17.57% lower than the same month last year, at a total of 576,468 bags. Uganda Robusta exports registered a 19.91% decrease when compared to the same month last year, to total 528,235 bags and Arabica exports registered a comparative increase by 21.24% to a total 48,233 bags exported in July this year. The UCDA likewise report that the cumulative exports for the first ten months of the current October 2021 to September 2022 coffee year to be 360,233 bags or 6.92% lower than the same period in the previous year, at a total of 4,847,892 bags. The UCDA have likewise reported that over the same first ten months of the current October 2021 to September 2022 coffee year, the value of exports has been to increase by 50.38% when compared to the same period in the previous year. The increased return in value terms reflective to some degree of the improved value in the futures markets, over the same period, with arabica export proceeds contributing to the overall earnings report, where a volume increase of 55.55% over the ten month period similarly translated into 145.98% increase in value.
The November 2022 to December 2022 contract arbitrage between the London and New York widened yesterday to register this at 119.46 usc/Lb. This equates to 54.01% 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 increase by 13,905 bags on Friday, to register these stocks at 610,680 bags, with 93.05% of these certified stocks being held in Europe at a total of 568,252 bags and the remaining 6.95 % being held in the USA at a total 42,428 Of this, a total 176,540 bags, or 28.91% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 57.55% of these certified coffees, originating from Honduras. There were meanwhile 18,045 bags increase to the number of bags pending grading to the exchange; to register 228,486 bags pending grading on the day.
It was a mixed but overall softer day on the commodity markets yesterday, with the US Dollar reaching a five-week high ahead of looming interest rate hikes. The Coffee, Corn, Soybean and Wheat markets ended the day on a positive note, the Cocoa market remained unchanged on the day, while the Sugar, Cocoa, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.176 Sterling, at 0.993 the Euro and with the US Dollar buying 5.157 Brazil Real.
The New York market started the day yesterday trading to the south of par on a modest softer note, while the London market opened higher on the day. Both the New York and London markets would oscillate around par for the remainder of the early morning session before attracting buying support to take a firmer track into the early afternoon session. As the afternoon progressed both the New York and the London markets moved firmer. The support in New York was seen to push the market higher, before gains were capped late in the day which saw the market drop back slightly to settle on a very firmer note at the close, while the London market followed the New York market higher to likewise settle on a firm note at the close.
The London market ended the day on a positive note with 62.96% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 80.10% of the earlier gains of the day intact. This follow through firmer close for the markets is likely to influence some degree of confidence and direction with the New York market settling near to the highs of the day, one might think that the markets are due 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.
NOV 2243 + 17 DEC 221.20 + 7.85
JAN 2222 + 16 MAR 216.45 + 7.35
MAR 2193 + 15 MAY 213.85 + 7.30
MAY 2186 + 14 JUL 211.75 + 7.30
JUL 2178 + 13 SEP 210.20 + 7.25
SEP 2170 + 13 DEC 208.50 + 6.95
NOV 2162 + 13 MAR 206.55 + 6.60
JAN 2160 + 13 MAY 205.00 + 6.40
