Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector increase their net short position by 62.64% within this market over the week of trade leading up to Tuesday 15th. November 2022; to register a new net short position at 18,786 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position by 0.72% within the market, to register a new net long position of 36,526 Lots on the day.
Over the same week, the Non-Commercial Speculative increase their net short position by 20.89% within the market over the week of trade leading to Tuesday 15th. November 2022: to register a net short position of 23,378 lots, which is the equivalent of 6,627,559 bags. This net short position has most likely been decreased further following the period of softer trade that has since followed.
The respected U.S. Department of Agriculture Global Agricultural Network USDA have maintained their forecast for the production from the predominantly Robusta coffee producing nation of Indonesia for the current April 2022 to March 2023 coffee marketing year, to reach an overall 11,350,000 bags, or 7.27% larger than the previous coffee marketing year in April 2021 to March 2022, with production that is reported at 10,580,000 bags. The production figures for the April 2022 to March 2023 coffee year are forecast to be made up of 10,000,000 bags Robusta coffee and 1,350,000 bags Arabica Coffee.
Of this new crop, the forecast is that Indonesia will export 4.45% or 281,000 bags more than the previous marketing year at a total of 6,600,000 bags of green coffee.
The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of October were 27,715 bags or 5.71% lower than the same month last year, at a total of 457,244 bags. Uganda Robusta exports registered a 6.47% decrease when compared to the same month last year, to total 398,592 bags and Arabica exports likewise registered a marginal 0.25% decrease when compared to the some month last year to total 58,652 bags exported in October this year. This marks the first month of the New October 2022 to September 2023 coffee year.
The UCDA have reported that during the month of October, the value of exports has been seen to have increased by 9.82% when compared to the same month in the previous year. The increased return in value terms reflective to some degree of the improved value in the futures markets, over the same period.
The January 2023 to March 2023 contract arbitrage between the London and New York markets widened yesterday to register this at 78.21 usc/Lb. This equates to 48.76% 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 15,380 bags yesterday, to register these stocks at 513,189 bags, with 89.68% of these certified stocks being held in Europe at a total of 460,231 bags and the remaining 10.32% being held in the USA at a total 52,958. Of this, a total 302,115 bags, or 58.87% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 35.96% of these certified coffees, originating from Honduras. There was meanwhile a 8,810 bags decrease to the number of bags pending grading to the exchange; to register 560,828 bags pending grading on the day.
It was a softer day the commodity markets yesterday, with the US Dollar taking a firmer track throughout the session ahead of the Thanksgiving Holiday in the USA this Thursday, 24th November 2022. The Soybean and Platinum markets ended the day on a positive note, while the Coffee, Cocoa, Corn, Sugar, Wheat, Gold, Silver and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.186 Sterling, at 1.027 the Euro and with the US Dollar buying 5.320 Brazil Real.
The New York and London markets started the yesterday trading to the north of par on a modest firmer note. This early support was short lived, as the markets quickly dipped back below par to trend softer for the remainder of the early morning session. As the afternoon progressed, the New York and London markets were seen to register a rebound tracking upward as speculative buying support returned to the floor. The New York and London markets gaining momentum to rally late in the day around the opening of business day in the Americas’, fair volumes of trade, both markets continued to move in a firmer direction. The upward momentum brought sellers back to the floor at the top of the day, and both New York and London markets hit a ceiling late in the day to limit the sessions gains. The New York market settled near to the highs of the day on a very firm note, while the London market dropped back to settle near to unchanged from the previous day’s close.
The London market ended the day on a modest near to unchanged positive note with 12.50% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 77.37% of the earlier gains of the day intact. With First Notice day hurdled, the relatively firmer performance in New York market gaining momentum throughout the day to settle on a firmer note at the close, might indicate some degree of confidence and direction to possibly see the markets 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 1812 + 1 MAR 160.40 + 5.30
MAR 1788 + 1 MAY 160.75 + 5.05
MAY 1779 Unch JUL 160.90 + 4.70
JUL 1772 – 2 SEP 160.75 + 4.45
SEP 1767 – 2 DEC 160.65 + 4.10
NOV 1761 – 2 MAR 161.40 + 3.85
JAN 1770 – 2 MAY 161.95 + 3.70
MAR 1779 – 2 JUL 162.50 + 3.55
