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 50.50% of the new, majority natural processed arabica crop coffees as at 14th July 2023. This compared with the same period last year, and a harvest of 42.80% 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.

The Ivory Coast have reported that their provisional coffee exports for the month of June were 88,433 bags or 88.52% lower than the same month last year, at a total of 11,467 bags. This has contributed to their country’s cumulative coffee exports for the first nine months of the October 2022 to September 2023 coffee year to be 130,150 bags or 34.22% higher than the same period last year, at a total of 510,467 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 remain unchanged yesterday, to register these stocks at 541,266 bags, with 98.63% of these certified stocks being held in, Europe at a total of 533,827 bags and the remaining 1.37% being held in the USA at a total 7,439. Of this, a total 165,173 bags, or 30.52% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 64.77% of these certified coffees, originating from Honduras. There was meanwhile no change 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 37.34 usc/Lb. This equates to 24.01% price discount for the London Robusta coffee market.

It was a mixed but overall firmer day on the commodity markets yesterday, as investors await further news on what stance the US Federal Reserve would take in the interest rate cycle. The London Robusta Coffee, Cocoa, Corn, Sugar, Soybean, Wheat and Silver markets ended the day on a positive note, while the New York Arabica Coffee, Gold, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.294 Sterling, at 1.122 the Euro and with the US Dollar buying 4.791 Brazil Real.

The New York market started the day yesterday trading north of par on a modest firmer note, while the London market started the day trading to the south of par on a modest softer note. The markets both gained support early to trend in a firmer direction to the upside of par. This early support was short lived in the New York market which quickly dropped back to be set in on a softer path while the London market carried through the momentum into the mid-afternoon session to trend in a firmer direction. As the afternoon progressed, the New York market hit a floor for the day to limit the day's losses and rebound from the lows, while the London market continued to build momentum and move in a firmer direction accentuating the gains for the day. The upward momentum in London driven by speculative sentiment. The London robusta market steamed ahead and prompt month activity continued to build through the trading day. The New York market settled on a modest softer note, while the London market settled near to the highs of the day on a firmer note at the close.

The London market ended the day on a positive note with 92.31% of the earlier gains of the day intact, while the New York market ended the day on a modest softer note with 69.56% of the earlier losses of the day intact. This mixed close for the markets does little to inspire confidence with the New York market maintain most of the earlier losses of the day, one might think that the markets are due for a follow through hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

SEP     2604 + 72                                 SEP     155.50 – 0.80
NOV   2438 + 45                                 DEC    155.85 – 0.60
JAN    2363 + 37                                 MAR   156.85 – 0.45
MAR  2329 + 37                                 MAY    158.20 – 0.30
MAY  2309 + 34                                 JUL      159.25 – 0.30
JUL    2295 + 32                                 SEP      160.45 – 0.30
SEP    2287 + 33                                 DEC     161.90 – 0.40
NOV  2285 + 34                                 MAR    162.90 – 0.40