Coffee Market Report

The Brazil government have reported preliminary data that illustrates the country’s green coffee exports for the month of May were 0.97% lower than the same month last year, at a total of 2.35 million bags. The official breakdown of coffee exports by description for May will soon be released and can be anticipated to illustrate this figure more accurately.

Safras & Mercado have estimated that almost 20% of the new Brazil coffee crop has already been harvested. The harvest this year is at a slower pace, when compared to the 5-year average at the same time, which is at approximately 23%. Based on the forecast for a new crop of 66.65 million bags, the report would indicate that so far approximately 13.33 million bags of the new crop have been harvested. The coffee made up of around 6.95 million bags of Conilon Robusta coffee, which begin harvest earlier in the seasonal year, and approximately 6.10 million bags of arabica coffee harvested thus far. It is expected that the harvest will start to speed up during the days to come under favourable weather conditions for harvesting

The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of May were 412,827 bags or 78.96% higher than the same month last year, at a total of 935,674 bags. This they say has contributed to the cumulative coffee exports for first eight months of the current October 2022 to September 2023 coffee year to be 1,017,025 bags or 31.70% higher than the same period in the previous coffee year, at a total of 4,225,606 bags. IHCAFE expects that exports from the current October 2022 to September 2023 crop year are forecast to be 17.45% higher than the previous October 2021 to September 2022 year, to reach a total of 5.52 million bags.

The Ivory Coast have reported that their provisional coffee exports for the month of April were 51,450 bags or 63.22% lower than the same month last year, at a total of 33,800 bags. This has contributed to their country’s cumulative coffee exports for the first seven months of the October 2022 to September 2023 coffee year to be 152,749 bags or 81.02% higher than the same period last year, at a total of 341,283 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 9,075 bags yesterday, to register these stocks at 574,443 bags, with 97.71% of these certified stocks being held in, Europe at a total of 561,309 bags and the remaining 2.29% being held in the USA at a total 13,134. Of this, a total 192,262 bags, or 34.47% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 62.38% 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 widened yesterday to register this at 64.89 usc/Lb. This equates to 35.45% price discount for the London Robusta coffee market.

It was a firmer day on the commodity markets yesterday, with the US Dollar losing ground against a basket of other currencies, as expectations mounted on where the US Federal Reserve monetary policy would go at their next meeting due to be held later this month. The Cocoa and Sugar markets ended the day on a positive note, while the Coffee, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.253 Sterling, at 1.076 the Euro and with the US Dollar buying 5.014 Brazil Real.

The New York and London markets started the day on yesterday trading to the north of par on firmer notes respectively, both markets continued to track mildly firmer for the remainder of the morning session before gaining momentum to as support was seen to build during the late morning session. As the afternoon progressed the New York and London markets, buoyed further with buy stops triggered as speculative buyers became active, upward momentum continued to build to see both markets hit a ceiling for the day’s session, to limit the gains for the day, late during the session. Late in the day the markets dropped back from the day’s highs to see the New York market settle on a firmer note at the close, while the London market followed suit to likewise settle on a firmer note at the close.

The London market ended the day on a positive note with 77.78% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 72.73% of the earlier gains of the day intact. This follow through firmer close for the markets, might provide some degree of support and direction, with both the New York and the London markets settling near to the highs of the day, one might think that the markets are due 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.

JUL      2605 + 49                                      JUL     183.05 + 4.40
SEP      2567 + 47                                      SEP     180.25 + 4.40
NOV    2507 + 42                                      DEC    177.90 + 4.30
JAN     2453 + 37                                      MAR   177.40 + 4.15
MAR   2440 + 31                                      MAY   177.70 + 4.00
MAY   2430 + 26                                      JUL      178.10 + 3.90
JUL     2422 + 25                                      SEP      178.75 + 3.75
SEP     2411 + 24                                      DEC     179.70 + 3.55