Coffee Market Report

The Brazil government have reported preliminary data that illustrates the country’s green coffee exports for the month of October were 5.85% higher than the same month last year, at a total of 3.33 million bags. The official breakdown of coffee exports by description for October will soon be released and can be anticipated to illustrate this figure more accurately.

The first month of the new coffee October 2022 to September 2023 coffee year is complete, with production and export data coming to the fore, and the National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of October were 37,478 bags or 46.66% lower than the same month last year, at a total of 42,850 bags. IHCAFE have likewise reported that during the new October 2022 to September 2023 coffee year, the country is expected to export 5.52 million bags, or 17.70% more than the previous October 2021 to September 2022 coffee year, which IHCAFE report to have come in at a climatically induced overall lower than anticipated, against preharvest forecasts for the 2021/22 coffee year, total 4.70 million bags.

The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of October were 22.10% lower than the same month last year, at a total of 9,591 bags. ICAFE have also reported that during the October 2021 to September 2022 coffee year, cumulative coffee exports from Costa Rica were registered at 8.80% lower than the same period in the previous coffee year, at a total of 1.06 million bags

Today is the Dia de Finados (All Souls’ Day) public holiday in Brazil which shall most likely keep most internal market players out of the market today.

The December 2022 to January 2023 contract arbitrage between the New York and London markets narrowed yesterday to register this at 91.18 usc/Lb. This equates to 52.22% 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 remain unchanged yesterday, to register these stocks at 384,795 bags, with 86.15% of these certified stocks being held in Europe at a total of 331,517 bags and the remaining 13.85% being held in the USA at a total 53,278. Of this, a total 230,657 bags, or 59.94% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 32.30% of these certified coffees, originating from Honduras. There was meanwhile 20,152 bags increase to the number of bags pending grading to the exchange; to register 122,096 bags pending grading on the day.

It was a firmer day on the commodity markets yesterday, as the US Dollar lost ground against a basket of other currencies, while the markets await news from the US Federal Reserve policy meetings that are due to conclude today. The Cocoa, Sugar, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Coffee markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.151 Sterling, at 0.988 the Euro and with the US Dollar buying 5.143 Brazil Real.

The New York and London markets started the day yesterday, carrying through momentum from the firmer close on Monday to start the day trading to the north of par, both the New York and the London markets oscillated around par for the remainder of the early morning session. The late morning session attracted buying support, which saw both the New York and the London markets trend in a firmer direction. As the afternoon progressed, both the New York and the London hit a ceiling, to come under some degree of selling pressure in mainly technical trade. The markets continued to project lower, pressured further by selling in the market to accentuate the losses for the day’s trade. The late afternoon session saw both the New York and the London markets rebound from the earlier lows, to find some degree of support. This support late in the day, saw the New York market settle on a softer note recovering some of the earlier losses, while the London market followed suit to likewise settle on a softer note at the close.

The London market ended the day on a negative note with 51.85% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 79.49% of the earlier losses of the day intact. This softer close for the markets, does little to indicate direction in what would be considered a relatively thin trade volume day. One might think that the markets are due for a follow through hesitant start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT              NEW YORK USC/LB.
 
JAN     1839 – 14                                      DEC    174.60 – 3.10
MAR   1827 – 13                                      MAR   170.20 – 3.85
MAY   1816 – 14                                      MAY    168.55 – 4.40
JUL     1811 – 14                                      JUL      167.35 – 4.75
SEP     1805 – 14                                      SEP      166.20 – 5.00
NOV   1799 – 14                                      DEC     164.95 – 5.35
JAN    1809 – 14                                      MAR    164.65 – 5.35
MAR  1818 – 14                                      MAY     164.45 – 5.15