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 decrease their net long position by 8.77% within this market over the week of trade leading up to Tuesday 2nd. May 2023; to register a new net long position at 32,006 Lots. The longer term in nature Index Fund sector of this market marginally increased their net long position by 0.05% within the market, to register a new net long position of 56,652 Lots on the day.
Over the same week, the Non-Commercial Speculative decreased their net long position by 13.36% within the market over the week of trade leading to Tuesday 2nd. May 2023: to register a new net long position of 17,201 lots, which is the equivalent of 4,876,407 bags. This net long position has most likely been little changed following the period of mixed trade that has since followed.
The Ivory Coast have reported that their provisional coffee exports for the month of March were 17,633 bags or 52.45% higher than the same month last year, at a total of 51,250 bags. This has contributed to their country’s cumulative coffee exports for the first six months of the October 2022 to September 2023 coffee year to be 204,199 bags or 197.71% higher than the same period last year, at a total of 307,483 bags. The median estimate forecast for the current October 2022 to September 2023 production coffee year from this robusta coffee producer nation is anticipated to reach 1.05 million bags or 6.67% lower than the previous 2021/2022 coffee year.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,141 bags yesterday, to register these stocks at 655,156 bags, with 97.01% of these certified stocks being held in, Europe at a total of 635,504 bags and the remaining 2.99% being held in the USA at a total 19,652. Of this, a total 260,978 bags, or 39.83% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 56.44% 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 71.87 usc/Lb. This equates to 39.07% 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 mixed day on the commodity markets yesterday, with newly released US Jobs data indicating positive growth during April as the markets look for direction on further interest rate decisions to come. The Cocoa, Gold, Platinum and Palladium market ended the day on a positive note, the Soybean and Sugar markets remained unchanged, while the New York Arabica Coffee, Corn, Wheat and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.261 Sterling, at 1.099 the Euro and with the US Dollar buying 5.009 Brazil Real.
The New York market traded solo for a shortened day of trade yesterday and started the day trading to the south of par on a modest softer note, before attracting buying support early to see the market trend firmer during the early morning session. The market quickly hit a ceiling to limit the gains for the day and reverse the trend. The New York market was quickly pressured lower. As the afternoon progressed, the New York market came under severe selling pressure, which saw the market continue to project lower with further long liquidation selling to accentuate the losses for the day’s trade. Late in the day the market would hit a floor, to limit the losses for the day, which saw the New York market settle on a very soft note, near to the lows of the day at the close.
The London market ended the day on Friday on a positive note with 93.65% of the earlier gains of the day intact, while the New York market ended the day yesterday on a negative note with 89.13% of the earlier losses of the day intact. This softer close for the New York market does little to indicate direction and one might think that the markets may possibly be set for little better than a 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: 05/05/2023 Close: 08/05/2023
JUL 2471 + 59 JUL 183.95 – 4.10
SEP 2446 + 55 SEP 181.60 – 4.00
NOV 2408 + 54 DEC 179.70 – 4.05
JAN 2381 + 54 MAR 179.65 – 4.00
MAR 2360 + 52 MAY 180.05 – 3.95
MAY 2341 + 52 JUL 180.55 – 3.85
JUL 2325 + 52 SEP 181.20 – 3.85
SEP 2315 + 52 DEC 181.50 – 3.80
