Coffee Market Report
The December 2022 to January 2023 contract arbitrage between the New York and London markets widened yesterday to register this at 96.78 usc/Lb. This equates to 53.13% 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 20,080 bags increase to the number of bags pending grading to the exchange; to register 142,176 bags pending grading on the day.
It was a mixed day on the commodity markets yesterday, the markets focus remain on the annoucements by the US Federal Reserve Bank, to confirm a further .75 basis point interest rate hike, the cumulative increase to register the highest level in interest rates for this leading consumer market, since 2008. The Greenback lost ground against a basket of other currencies, on the day. The Coffee, Cocoa, Sugar and Soybean markets ended the day on a positive note, while the Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.147 Sterling, at 0.983 the Euro and with the US Dollar buying 5.143 Brazil Real.
The New York and London markets started the day yesterday trading on a firmer note. During the early morning session, the New York market gained upward momentum, with the London market following suit to likewise set a positive track through the morning. As the afternoon progressed, the New York buoyed by buy stops, with speculative buyers active, continued to build through the day. The mid-afternoon session saw both the New York and London markets hit a ceiling for the day, as selling activity increased to push the markets off of the highs of the session. The national holiday in Brazil following the Presidential race and result, as well as a relatively firm Brazil Real, may have contributed toward the sentiment on the day. Both markets plateaued following earlier gains and in a positive range for the remainder of the day. The late afternoon session saw the New York market recover from the late pressure to trend back towards the highs of the day, following a fair volume day, this market settled on a positive note, near to the highs of the day. The London market followed suit to also settle on a positive note at the close.
The London market ended the day on a positive note with 89.58% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 85.80% of the earlier losses of the day intact. This firmer close for the markets, and with both the New York and the London markets settling near to the highs of the day, albeit lacking the participation of the Brazilian market who were closed for a national holiday, might inspire some degree of follow through momentum to possibly see the market set 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.
JAN 1882 + 43 DEC 182.15 + 7.55
MAR 1863 + 36 MAR 176.95 + 6.75
MAY 1850 + 34 MAY 175.15 + 6.60
JUL 1844 + 33 JUL 173.85 + 6.50
SEP 1837 + 32 SEP 172.70 + 6.50
NOV 1829 + 30 DEC 171.45 + 6.50
JAN 1837 + 28 MAR 171.15 + 6.50
MAR 1845 + 27 MAY 171.10 + 6.65
