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 41.42% within the market over the week of trade leading to Tuesday 17th. January 2023: to register a new net short sold position of 43,940 lots, which is the equivalent of 12,456,795 bags. This net short position has most likely been decreased following the period of mixed but overall firmer trade that has since followed.

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector cut their net short position by 39.79% within the market over the week of trade leading to Tuesday 17th. January 2023: to register a new net short sold position of 11,806 Lots which is the equivalent of 1,967,667 bags. This net short position has most likely been decreased further following the period of mixed but overall firmer trade that has since followed.

The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of December were 118,445 bags or 22.04% lower than the same month last year, at a total of 418,829 bags. Uganda Robusta exports registered a 26.81% decrease when compared to the same month last year, to total 331,476 bags and Arabica exports registered a comparative 3.51% increase when compared to the same month last year to total 87,353 bags exported in December 2022. The UCDA also reports that the cumulative exports for the first three months of the current October 2022 to September 2023 coffee year to be 227,307 bags or 14.68% lower than the same period in the previous year, at a total of 1,320,841 bags.

The UCDA have reported that during the month of December, the overall value of coffee exports has been seen to have decreased by 20.99% when compared to the same month in the previous year, to total 59.53 million US Dollars. The UCDA have reported that the drop in Robusta exports during the month of December was mainly attributed to lower yields due to weather related conditions which led to a shorter main harvest season.

The March 2023 to March 2023 contract arbitrage between the London and New York markets narrowed on Friday to register this at 66.62 usc/Lb. This equates to 43.04% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 7,939 bags on Friday, to register these stocks at 851,625 bags, with 94.55% of these certified stocks being held in Europe at a total of 805,223 bags and the remaining 5.45% being held in the USA at a total 46,402. Of this, a total 458,681 bags, or 53.86% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 42.81% of these certified coffees, originating from Honduras. There was meanwhile a 19,482 bags decrease to the number of bags pending grading to the exchange; to register 63,160 bags pending grading on the day.

It was a mixed day on the commodity markets on Friday, with the US Dollar gaining momentum against a basket of other currencies. The Coffee, Sugar, Wheat, Silver and Platinum markets ended the day on a positive note, while the Cocoa, Corn, Soybean, Gold and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.242 Sterling, at 1.089 the Euro and with the US Dollar buying 5.207 Brazil Real.

The New York and London markets started the day on Friday, trading to the north of par on a modest firmer note. Both markets attracted buying support early to see the markets trend in a positive direction for the remainder of the early morning session. The mid-morning session New York market came under some degree of selling pressure, to see the market drop back from the early highs and trend lower, to drop below par. As the afternoon progressed, the New York market continued to be pressured lower by selling activity in the market. The London market followed suit, albeit in a more sedate manner. The New York market hit a floor for the day, to find support and recover all the earlier losses. The New York market registered a recovery late in the day to see the market settle on a modest firmer note at the close, while the London market also settled on a firmer note at the close.

The London market ended the day on a positive note with 89.66% of the earlier gains of the day intact, while the New York market ended the day on a likewise modest near to unchanged positive note with 25% of the earlier gains of the day intact. This overall firmer close for the markets, might indicate some degree of direction and confidence, albeit that the New York market fell back from the earlier in the day highs, to possibly see the markets set for a follow through steady start to early trade today, against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT              NEW YORK USC/LB.

MAR  1944 + 26                                       MAR   154.80 + 0.20
MAY  1909 + 25                                       MAY   155.75 + 0.25
JUL    1879 + 22                                       JUL     156.30 + 0.35
SEP    1852 + 19                                       SEP     156.40 + 0.30
NOV  1833 + 18                                       DEC    156.50 + 0.25
JAN   1825 + 17                                       MAR   157.05 + 0.25
MAR 1825 + 17                                       MAY   157.60 + 0.20
MAY 1831 + 17                                       JUL     157.90 + 0.05