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 7.25% within the market over the week of trade leading to Tuesday 5th September 2023: to register a new net short position of 25,869 lots, which is the equivalent of 7,333,746 bags. This net short position has most likely been little decreased further following the period of mixed but overall 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 increased their net long position by 24.02% within the market over the week of trade leading to Tuesday 5th September 2023: to register a new net long position of 19,582 Lots which is the equivalent of 3,263,667 bags. This net long position has most likely been little changed following the period of mixed but overall softer trade that has since followed.

The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of August have registered 2.30% lower from the previous month, at 1,410,783 bags. This number is proving to be lower than the 1.50 million bags that had been initially forecast for the month’s coffee exports. The cumulative export performance for the first eleven months of the current October 2022 to September 2023 coffee year in Vietnam, the largest producer of robusta coffee is reported to be 1,016,432 bags or 3.93% higher than the same period in the previous year, at a total 26,855,949 bags.

The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first eight months of the calendar year, is reported at 3.10% higher than the same period in the previous year, at a total of approximately 2.90 billion US Dollars.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,258 bags yesterday, to register these stocks at 450,153 bags, with 98.30% of these certified stocks being held in, Europe at a total of 442,515 bags and the remaining 1.70% being held in the USA at a total 7,638. Of this, a total 117,667 bags, or 26.14% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 68.69% 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 November 2023 to December 2023 contract arbitrage between the London and New York markets narrowed on Friday to register this at 39.45 usc/Lb. This equates to 26.36% price discount for the London Robusta coffee.

It was a softer day overall on the commodity markets on Friday, with investors focus turning to inflation data due out later this week. The Cocoa, Soybean and Gold markets ended the day on a positive note, the London Robusta Coffee remained unchanged on the day, while the New York Arabica Coffee, Corn, Sugar, Wheat, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.251 Sterling, at 1.073 the Euro and with the US Dollar buying 4.984 Brazil Real.

The New York and London markets started the day on Friday trading to the north of par on modest firmer notes respectively. The markets oscillated to either side of par for the remainder of the early morning session. The late morning session saw the markets begin to attract some degree of selling pressure and start to track lower into the late morning session. As the afternoon progressed, the markets continued to trend in a softer direction, dropping back from the earlier modest 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 recovered all of the earlier losses of the day, to settle unchanged for the day.

The London market remained unchanged on the day, while the New York market ended the day on a negative note with 65.71% of the earlier losses of the day intact. This follow through softer close for the markets, does little to indicate direction with the New York market retaining most of the losses of the day, one might think that the markets may possibly be set for a hesitant steady start to early trade today, against the prices set on Friday, as follows:

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

NOV   2407 Unch                                         DEC   148.65 – 1.15
JAN    2311 – 14                                           MAR  149.80 – 1.15
MAR  2259 – 18                                           MAY  150.90 – 1.20
MAY  2240 – 18                                           JUL    151.60 – 1.15
JUL    2234 – 19                                           SEP    152.05 – 1.20
SEP    2228 – 19                                           DEC   153.05 – 1.20
NOV  2225 – 19                                           MAR  154.20 – 1.15
JAN   2216 – 19                                           MAY   155.25 – 1.15