Coffee Market Report

12th. September 2022.
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 6.51% within the market over the week of trade leading to Tuesday 6th. September 2022: to register a net long position of 28,752 lots, which is the equivalent of 8,151,064 bags. This net long position has most likely been decreased further following the period mixed but overall softer trade that 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 cut their net long position by 6.56% within the market over the week of trade leading to Tuesday 6th. September: to register a new net long position of 28,425 Lots which is the equivalent of 4,737,500 bags. This net long position has most likely been little changed following the period of mixed but overall sideways trade that that has since followed.

The November 2022 to December 2022 contract arbitrage between the London and New York widened on Friday to register this at 125.81 usc/Lb. This equates to 53.54% 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 8,648 bags on Friday, to register these stocks at 615,822 bags, with 91.46% of these certified stocks being held in Europe at a total of 560,683 bags and the remaining 8.54% being held in the USA at a total 55,139 Of this, a total 651,869 bags, or 57.14% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 32.22% of these certified coffees, originating from Honduras. There were meanwhile a 13,502 bags decrease to the number of bags pending grading to the exchange; to register 20,049 bags pending grading on the day.

It was a firmer day on the on the commodity markets yesterday, with the US Dollar losing ground against a basket of other currencies. A weaker Dollar is seen to be a bullish factor for many commodities traded on other currencies. The New York Arabica Coffee Cocoa, Sugar, Corn, Soybean, Wheat, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the London Arabica Coffee market ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.159 Sterling, at 1.007 the Euro and with the US Dollar buying 5.214 Brazil Real.

The New York and London market started the day on Friday trading on a softer note, both markets quickly gained support to see the markets trend in a firmer direction for the remainder of the morning session. As the afternoon progressed the New York market gained further momentum with activity picking up to see speculative buy stops triggered along the way. The London market followed suit, albeit in a more sedate manner. The New York market was seen to continue trending in a firmer direction before being capped late in the day. The London market dropped back from the highs of the day to see the market settle on a modest softer note at the close. The New York market was seen to settle on a very firm note at the close.

The London market ended the day on a negative note with 54.54% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 78.75% of the earlier gains of the day intact. This overall firmer close for the markets might indicate some degree of confidence to possibly see the markets set for a follow through firmer close to early trade today, against the prices set on Friday, as follows:

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

NOV 2264 – 12                                        DEC 228.50 + 6.30
JAN 2253 – 2                                           MAR 222.65 + 5.95
MAR 2223 + 5                                         MAY 219.00 + 5.80
MAY 2209 + 6                                         JUL 215.85 + 5.55
JUL 2196 + 6                                           SEP 213.45 + 5.30
SEP 2187 + 6                                           DEC 211.20 + 4.95
NOV 2175 + 6                                         MAR 209.05 + 4.75
JAN 2170 + 6 MAY 207.75 + 4.80