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 short position by 52.74% within this market over the week of trade leading up to Tuesday 11th July 2023; to register a new net short position at 12,809 Lots. The longer term in nature Index Fund sector of this market decreased their net long position by 5.77% within the market, to register a new net long position of 45,544 Lots on the day.

Over the same week, the Non-Commercial Speculative increased their net short position by 26.79% within the market over the week of trade leading to Tuesday 11th July 2023: to register a new net long position of 13,342 lots, which is the equivalent of 3,782,398 bags. This net short position has most likely been little changed following the period of mixed but overall sideways softer trade that has since followed.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,000 bags yesterday, to register these stocks at 544,203 bags, with 98.60% of these certified stocks being held in, Europe at a total of 536,577 bags and the remaining 1.40% being held in the USA at a total 7,626. Of this, a total 165,360 bags, or 30.39% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 64.42% of these certified coffees, originating from Honduras. There was meanwhile a 2,483 bags decrease to the number of bags pending grading to the exchange; to register 0 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 40.04 usc/Lb. This equates to 25.70% price discount for the London Robusta coffee market.

It was a mixed day on the commodity markets yesterday, with the leading in influence Oil markets softer on the day. The London Robusta Coffee, Cocoa, Soybean, Platinum and Platinum markets ended the day on a positive note, while the New York Arabica Coffee, Corn, Sugar, Wheat, Gold and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.310 Sterling, at 1.126 the Euro and with the US Dollar buying 4.807 Brazil Real.

The New York and London markets started the yesterday trading to the north of par in modest firmer territory. The New York market was seen to oscillate around par for the remainder of the early morning session, before attracting some degree of selling pressure to trend in a softer direction during the morning session, while the London market was seen to trend firmer into the mid-morning session. As the afternoon progressed the New York market continued on a softer path, while the London market was seen to hit a ceiling to limit the days gains and drop back from the earlier highs of the day. The New York market attracted fresh selling activity late in the day, to see the market extend the losses for the day and settle on a softer note at the close, while the London market dropped back from the earlier highs to settle on a softer note at the close.

The London market ended the day on a modest positive note with 26.09% of the earlier gains of the day intact, while the New York market ended the day on a negative note with 87.72% of the earlier losses of the day intact. This mixed but overall softer close for the markets does little to inspire confidence, with the New York market retaining most of the earlier losses of the day and the London market settling on a modest near to unchanged firmer note at the close, one might think that the markets are due for little better than follow-through hesitant start to early trade today, against the prices set yesterday, as follows:

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

SEP     2552 + 12                                    SEP     155.80 – 5.00
NOV   2406 + 1                                      DEC    155.65 – 4.65
JAN    2331 – 9                                       MAR  156.40 – 4.50
MAR  2297 – 12                                     MAY  157.55 – 4.40
MAY  2278 – 14                                     JUL    158.50 – 4.40
JUL    2266 – 13                                     SEP    159.60 – 4.45
SEP    2257 – 12                                     DEC   160.90 – 4.45
NOV  2254 – 10                                     MAR  161.65 – 4.50