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 increase their net long position by 4.54% within this market over the week of trade leading up to Tuesday 25th April 2023; to register a new net long position at 35,081 Lots. The longer term in nature Index Fund sector of this market increased their net long position by 1.80% within the market, to register a new net long position of 56,624 Lots on the day.

Over the same week, the Non-Commercial Speculative decreased their net long position by 2.01% within the market over the week of trade leading to Tuesday 25th. April 2023: to register a new net long position of 19,854 lots, which is the equivalent of 5,628,521 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has followed.

With the month of April now complete and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of April will be 27.20% higher than the same month last year, at a total of approximately 3,333,333 bags.

The April 2023 export performance is anticipated to result in the countries coffee exports for the first seven months of the current October 2022 to September 2023 coffee year to be 22.54% higher than the same period last year, at a total of 18,333,332 bags. The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first four months of the current calendar year, shall be marginally higher than the same period in the previous year, at a total of approximately 1.70 billion US Dollars.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 7,798 bags yesterday, to register these stocks at 672,365 bags, with 96.66% of these certified stocks being held in, Europe at a total of 649,923 bags and the remaining 3.34% being held in the USA at a total 22,442. Of this, a total 277,587 bags, or 41.29% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 55.08% of these certified coffees, originating from Honduras. There was meanwhile a no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

The July 2023 to July 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 76.33 usc/Lb. This equates to 41.13% 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.

It was a softer day on the commodity markets yesterday, as the US Dollar strengthened against a basket of other currencies on the day. The Soybean market ended the day on a positive note, while the New York Arabica Coffee, Cocoa, Sugar, Corn, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.254 Sterling, at 1.099 the Euro and with the US Dollar buying 4.987 Brazil Real.

The New York market traded solo yesterday and started the day trading on a firmer note, the market oscillated around par for the remainder of the morning session before attracting some degree of selling pressure to see the market drop back from the early modest highs and trend softer into the afternoon. As the afternoon progressed the New York market continued to trend in a softer direction before rebounding off the lows of the day to recover most of the earlier losses. This saw the market settle on a softer note at the close.

The London market ended the day on Friday on modest near to unchanged positive note with 26.67% of the earlier gains of the intact, while the New York market ended the day yesterday on a modest negative note with 11.86% of the earlier losses of the day intact. This modest softer close for the New York market does little to indicate direction and one might think that the markets may possibly be set for a hesitant steady start to early trade today, against the prices set in New York yesterday and in London on Friday, as follows:

LONDON ROBUSTA US$/MT              NEW YORK USC/LB.
Close: 28/04/2023                                    Close: 01/05/2023

JUL     2409 + 4                                          JUL    185.60 – 0.35
SEP     2386 + 3                                          SEP    182.75 – 0.45
NOV   2354 + 2                                          DEC   180.35 – 0.45
JAN    2327 + 1                                          MAR  180.05 – 0.40
MAR  2306 – 1                                           MAY  180.35 – 0.40
MAY  2294 – 1                                           JUL    180.80 – 0.40
JUL    2287 – 1                                           SEP    181.40 – 0.40
SEP    2281 – 1                                           DEC   181.50 – 0.35