Coffee Market Report

The world’s largest coffee cooperative Cooxupe, in Brazil have come forth with a report to confirm that their members have already harvested 17.09% of the new, majority natural processed arabica crop coffees as at 14th June 2023. This compared with the same period last year, and a harvest of 9.55% of the new crop. Weather has been conducive and this year the pace of harvest has thus far met with a similar pace as that of the 2019 crop year. Cooxupe expect to receive 8.30 million bags of coffee from farmers this harvest, of which the cooperative expects coffee exports to be 11.11% higher than the previous year, this they foresee to reach 6.60 million bags. Therefore, new July 2023 to June 2024 crop harvest, which is estimated at a median 43.50 arabica coffee, is on track and can be anticipated to gather further momentum throughout the vast arabica coffee regions, over the next couple of months.

Weather conditions are reported to remain conducive within Brazil, while a cold front that is forecast for the coming weekend, is predicted to be mild and is not anticipated to bring unusually low temperatures to the Brazil south eastern coffee regions ahead of the next full moon that is due for 3rd July, 2023.

The New York arabica coffee market shall be closed on Monday for the Juneteenth Federal Holiday that is observed on the 19th June, which shall see the London Robusta coffee market trading solo for the day.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 311 bags yesterday, to register these stocks at 547,800 bags, with 98.52% of these certified stocks being held in, Europe at a total of 539,690 bags and the remaining 1.48% being held in the USA at a total 8,110. Of this, a total 169,188 bags, or 30.88% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 64.91% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 10,887 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 60.80 usc/Lb. This equates to 32.97% price discount for the London Robusta coffee market.

It was a firmer day on the commodity markets yesterday, after the U.S. Federal Reserve kept interest rates unchanged, as was expected by the market, however it was indicated that there may be potential for further rate hikes to come, before the end of the year. The Coffee, Cocoa, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Corn, Soybean and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.263 Sterling, at 1.081 the Euro and with the US Dollar buying 4.816 Brazil Real.

The New York and London markets started the day yesterday, trading to the north of par on modest firmer notes respectively. The markets attracted selling pressure early in the day, to drop below par and trend lower before reversing the trend, to attract some degree of support during the early morning session, this saw the markets track above par, for the remainder of the early morning session. The late-morning session in New York saw the market drop back from the day’s highs to trend back towards par. In latter day trade, both markets settled into a narrow range, New York continued to oscillate around par to settle on a firmer note, while the London market followed suit, to maintain most of the earlier gains and settle on a likewise modest firmer note at the close.

The London market ended the day on a modest positive note with 66.66% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 41.25% of the earlier gains of the day intact. This firmer close for the markets, albeit that the New York market fell back from the earlier highs of the day to settle on a modest firmer note at the close, might indicate some degree of follow through direction to possibly see the markets set for a hesitant start to early trade today, against the prices set yesterday, as follows:

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

JUL     2725 + 12                                      JUL     184.40 + 1.65
SEP     2694 + 5                                        SEP    180.15 + 1.45
NOV   2612 + 5                                        DEC   178.35 + 1.45
JAN    2539 + 1                                        MAR  178.40 + 1.40
MAR  2510 – 3                                        MAY   179.20 + 1.40
MAY  2507 – 4                                        JUL     179.85 + 1.40
JUL    2500 – 8                                        SEP     180.60 + 1.40
SEP    2493 – 11                                      DEC    181.90 + 1.50