Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net long position by 9.05% within the market over the week of trade leading to Tuesday 4th. October 2022: to register a net long position of 24,327 lots, which is the equivalent of 6,896,597 bags. This net long position has most likely been little changed following the period of mixed but overall softer sideways 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 17.58% within the market over the week of trade leading to Tuesday 4th. October 2022: to register a new net long position of 18,125 Lots which is the equivalent of 3,020,833 bags. This net long position has most likely been little changed following the period of mixed but overall softer sideways trade that has since followed.
The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of September have registered 17.80% lower from the previous month, at 1,542,500 bags. This number is proving to be slightly lower than the 1.66 million bags that had been initially forecast for the month’s coffee exports. This sees the cumulative export performance for the full October 2021 to September 2022 coffee year in Vietnam, the largest producer of robusta coffee at 2,015,668 bags or 7.95% higher than the same period in the previous year, at a total 27,382,017 bags.
The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first nine months of the 2022 calendar year, is reported at 37% higher than the same period in the previous year, at a total of approximately 3.00 billion US Dollars.
The November 2022 to December 2022 contract arbitrage between the London and New York narrowed on Friday to register this at 120.35 usc/Lb. This equates to 55.18% 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 287 bags on Friday, to register these stocks at 416,719 bags, with 86.98% of these certified stocks being held in Europe at a total of 362,462 bags and the remaining 13.02% being held in the USA at a total 54,257. Of this, a total 259,356 bags, or 62.24% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 30.23% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 4,076 bags pending grading on the day.
It was a mixed day on the commodity markets on Friday, after newly released US jobs data for the month of September reflected better than expected results, cementing the hawkish nature of the US Federal Reserve Bank monetary policy stance. The US Dollar Index firmed on Friday to set a new high for the week. The Coffee, Sugar, Cocoa, Corn, Soybean and Wheat markets ended the day on a positive note, while the Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.108 Sterling, at 0.974 the Euro and with the US Dollar buying 5.199 Brazil Real.
The New York market started the day on Friday trading on a modest firmer note, while the London market started the day trading on a modest softer note, both markets were seen to oscillate around par for the remainder of the morning session, before taking a firmer track into the late morning session. As the afternoon progressed, the New York and London markets were seen to attract a degree of selling pressure which pushed the markets lower, the markets would hit a floor to limit the losses for the day and rebound to trend back towards par during the afternoon session. The late afternoon brought renewed confidence to the commodity markets, reflected in the New York market as renewed buying activity came to the floor, this market recovering the days’ losses, into positive territory to set a high for the day, before being capped and dropping back to settle on a modest firmer note at the close, while the London market settled on a likewise modest firmer note at the close.
The London market ended the day on a positive note with 71.40% of the earlier gains of the day intact, while the New York market ended the day on a likewise modest positive note with 11.94% of the earlier gains of the day intact. This firmer close for the markets, albeit that the New York market dropped back from the highs of the day to lose momentum late in the day, might inspire some degree of follow through momentum to possibly see the markets set for a hesitant steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 2155 + 15 DEC 218.10 + 0.40
JAN 2154 + 15 MAR 208.25 + 0.60
MAR 2133 + 15 MAY 203.85 + 0.55
MAY 2118 + 13 JUL 201.10 + 0.55
JUL 2110 + 13 SEP 199.20 + 0.45
SEP 2104 + 13 DEC 198.30 + 0.25
NOV 2089 + 16 MAR 197.85 + 0.05
JAN 2081 + 16 MAY 197.30 Unch
