Coffee Market Report

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net short position by 6.14% within the market over the week of trade leading to Tuesday 1st August 2023: to register a new net short position of 13,956 lots, which is the equivalent of 3,956,464 bags. This net short position has most likely been little increased marginally following the period of mixed but overall sideways softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector cut their net long position by 3.19% within the market over the week of trade leading to Tuesday 1st August 2023: to register a new net long position of 31,120 Lots which is the equivalent of 5,186,667 bags. This net long position has most likely been little changed following the period of mixed but overall firmer sideways trade that has since followed.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday, to register these stocks at 527,942 bags, with 98.23% of these certified stocks being held in, Europe at a total of 518,615 bags and the remaining 1.77% being held in the USA at a total 9,327. Of this, a total 159,492 bags, or 30.21% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 64.93% 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 on Friday to register this at 42.87 usc/Lb. This equates to 26.57% price discount for the London Robusta coffee.

It was a firmer day on the commodity markets on Friday, with the US Dollar falling back from highs against a basket of other currencies. The Cocoa, Corn, Soybean, Wheat, Gold, Silver and Platinum markets ended the day on a positive note, while the Coffee, Sugar and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.275 Sterling, at 1.102 the Euro and with the US Dollar buying 4.873 Brazil Real.

The New York and London markets started the day on Friday trading to the south of par on modest softer notes respectively. The markets oscillated to either side of par for the remainder of the early morning session. The late morning session saw the New York market attract some degree of buying support to trend firmer, while the London followed suit albeit in a more sedate manner. As the afternoon progressed, the markets continued to trend in a firmer direction, before hitting a ceiling during the mid-afternoon session to limit the gains for the day. The markets dropped back from the earlier highs, weighed by selling in what was mainly technical trade to see the New York market drop back below par, with the London market following suit. The markets continued a downward trajectory, accentuating the losses along the way. The selling activity started to wane toward the end of the days’ trade, to see the New York market recover some of the earlier losses of the day, while the London market narrowly recovered some of the earlier losses of the day. This saw both the New York and the London market settle in negative territory although above the lows on the day, in both markets.

The London market ended the day on a negative note with 73.33% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 90.67% of the earlier losses of the day intact. This follow through softer close for the markets, does little to indicate direction with both the New York and London markets retaining most of the losses of the day, one might think that the markets are due for a follow through hesitant start to trade today, against the prices set on Friday, as follows:

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

SEP 2612 – 33                                                    SEP 161.35 – 3.40
NOV 2488 – 28                                                  DEC 160.95 – 3.05
JAN 2412 – 25                                                   MAR 162.15 – 2.90
MAR 2374 – 25                                                 MAY 162.95 – 2.85
MAY 2357 – 24                                                 JUL 163.45 – 2.90
JUL 2344 – 23                                                   SEP 164.10 – 2.90
SEP 2337 – 24                                                   DEC 165.15 – 2.95
NOV 2334 – 24                                                 MAR 165.95 – 3.05