Coffee Market Report
| The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net short position by 373.09% within the market over the week of trade leading to Tuesday 1st. November 2022: to register a new net short sold position of 14,590 lots, which is the equivalent of 4,136,200 bags. This net short position has most likely been marginally extended, following the period of mixed but overall 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 increase their net short position by 181.90% within the market over the week of trade leading to Tuesday 1st. November 2022: to register a new net short sold position of 20,032 Lots which is the equivalent of 3,338,667 bags. This net short position has most likely been little changed following the period of firmer trade that has since followed.
The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 3.10% lower than the same month in the previous year, at a total of 9.95 million bags. This they say, has contributed to the cumulative global coffee exports for the full October 2021 to September 2022 coffee year to be 0.40% lower than the same period in the previous year, at a total of 128,986 million bags. The International Coffee Organisation ICO have maintained their forecast for global coffee supply at 2.10% lower than the previous year at a total of 167.20 million bags for the October 2021 to September 2022 coffee year. The International Coffee Organisation have likewise maintained their forecast for global consumption for the October 2021 to September 2022 coffee year, to grow by 3.30% from the previous year to reach a total of 170.30 million bags. The global coffee markets are indicated to have a very marginal coffee year deficit of 3.10 million bags heading in the October 2022 to September 2023 coffee year. These figures exclude carryover stocks in producer and consumer countries and with this 2021/22 coffee year now complete, the current October 2022 to September 2023 coffee year has begun and harvests in primary coffee producer and exporting countries are underway, to include the largest robusta producer, Vietnam, as well as combined quality washed arabica coffee producer bloc Colombia, Central America, Mexico and Peru. This, while the markets continue to focus their attentions to the development of the Brazil crop to supply 2023/24 coffee potential for production and consumption demand forecasts, to come. The ICO reported a decrease in exports from Brazil, who have registered a 11.40% decline in exports when compared to the previous October 2020 to September 2021 coffee marketing year. This due to biennially bearing nature of the Brazil coffee crop and the 2021/22 coffee year, a biennial lower bearing cycle. There was an increase in exports from Asia as Vietnam, India and Indonesia cumulatively registered a 12.80% increase in exports, when compared to the previous coffee year to total 43.86 million bags. Within the ICO report, exports for the October 2021 to September 2022 coffee year were seen to have decreased by 5.10% year on year from Africa to a total 13.73 million bags. The ICO report similarly includes within the total global exports, the export figures, from Mexico and the traditional washed arabica Central American bloc; Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to report for the October 2021 to September 2022 coffee year that exports were 3.30% lower than the same period in the previous year to total 16.09 million bags.
The December 2022 to January 2023 contract arbitrage between the New York and London markets widened on Friday to register this at 90.97 usc/Lb. This equates to 51.76% 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 5,291 bags on Friday, to register these stocks at 387,986 bags, with 86.27% of these certified stocks being held in Europe at a total of 334,708 bags and the remaining 13.73% being held in the USA at a total 53,278. Of this, a total 234,893 bags, or 60.54% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 32.05% of these certified coffees, originating from Honduras. There was a 9,463 bag increase to the number of bags pending grading to the exchange; to register 171,765 bags pending grading on the day.
It was a firmer day on the commodity markets on Friday, as the US Dollar weakened against a basket of other currencies, the macroeconomic data and recessionary indicators released by key economies, weighing in. The Coffee, Cocoa, Sugar, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note. The day starts with the U.S. Dollar trading at 1.133 Sterling, at 0.994 the Euro and with the US Dollar buying 5.056 Brazil Real.
The New York and London markets started the day on Friday trading on a very positive note, both markets quickly gained momentum, buoyed by support on the upside. The markets continued to trend in a firmer direction throughout the mid-morning session before losing some momentum late in the morning. As the afternoon progressed the New York and London markets would be seen to drop back from the mid-morning highs and to be pressured lower by selling in the markets, this was however short lived as both markets quickly gained momentum to recover the losses and trend firmer. The late afternoon session saw the New York and London market rally, to hit a ceiling limiting the gains for the day. The markets dropped back from the days highs to see the New York market settle on a firmer note at the close, while the London market followed suit albeit in a more sedate manner.
The London market ended the day on a positive note with 46.55% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 62.28% of the earlier gains of the day intact. This firmer close for the markets, might be an indication of some degree of direction, albeit that both the New York and the London markets dropped back from the earlier in the day highs. This might see the markets set for a follow through hesitant start to, against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK USC/LB. JAN 1869 + 27 DEC 175.75 + 3.55 MAR 1850 + 23 MAR 171.65 + 3.30 MAY 1835 + 19 MAY 170.20 + 3.25 JUL 1827 + 16 JUL 168.95 + 3.15 SEP 1820 + 15 SEP 167.80 + 3.05 NOV 1812 + 15 DEC 166.50 + 2.90 JAN 1821 + 16 MAR 166.35 + 2.90 MAR 1829 + 16 MAY 166.40 + 3.00 |
