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 25.70% within this market over the week of trade leading up to Tuesday 20th. June 2023; to register a new net long position at 20,357 Lots. The longer term in nature Index Fund sector of this market marginally increased their net long position by 0.48% within the market, to register a new net long position of 53,116 Lots on the day.

Over the same week, the Non-Commercial Speculative decreased their net long position by 4.26% within the market over the week of trade leading to Tuesday 20th. June 2023: to register a new net long position of 10,691 lots, which is the equivalent of 3,030,851 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday, to register these stocks at 546,650 bags, with 98.69% of these certified stocks being held in, Europe at a total of 539,491 bags and the remaining 1.31% being held in the USA at a total 7,159. Of this, a total 165,483 bags, or 30.27% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 64.98% of these certified coffees, originating from Honduras. There was meanwhile a 3,709 bags increase to the number of bags pending grading to the exchange; to register 7,249 bags pending grading on the day.

The September 2023 to September 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 42.22 usc/Lb. This equates to 25.56% price discount for the London Robusta coffee market.

It was a firmer day on the commodity markets yesterday, with the leading in influence Oil markets higher o the day. The Coffee, Cocoa, Corn, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Sugar and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.273 Sterling, at 1.092 the Euro and with the US Dollar buying 4.766 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 oscillated around par to trade in modest positive territory for the morning session, while the London market gained momentum to trend in a firmer direction. As the afternoon progressed the New York and London markets gained support to trend firmer. This saw the markets hit a ceiling for the day to limit the gains. The late afternoon session saw the markets drop back from the early afternoon highs pressured by some selling activity in relatively subdued trading volumes, to track back towards par. This saw the London market capped during the late afternoon session to drop back from the highs and settle on a firmer note at the close, while the New York market dropped back from the earlier in the day highs and settle on a modest, near to unchanged note at the close. The weather news from Brazil indicates conducive conditions for harvest, and average temperatures for the time of year across the arabica coffee regions.

The London market ended the day on a positive note with 62.96% of the earlier gains of the day intact, while the New York market ended the day on a likewise very modest firmer note with 13.96% of the earlier gains of the day intact. This follow through firmer close might inspire some degree of confidence, albeit that the markets dropped back from the earlier highs of the day to retain only some of the day's gains, one might therefore think that the markets are due for a hesitant start to early trade today, against the prices set yesterday, as follows:

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

SEP     2710 + 34                                      SEP    165.15 + 0.30
NOV   2628 + 21                                      DEC   163.65 – 0.20
JAN    2556 + 24                                      MAR  163.70 – 0.55
MAR  2530 + 26                                      MAY   164.45 – 0.75
MAY  2523 + 27                                       JUL    165.10 – 0.85
JUL    2515 + 27                                       SEP    165.90 – 0.90
SEP    2506 + 27                                       DEC   166.95 – 0.95
NOV  2487 + 27                                       MAR  167.70 – 1.05