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 short position by 46.46% within this market over the week of trade leading up to Tuesday 19th September 2023; to register a new net short position at 16,361 Lots. The longer term in nature Index Fund sector of this market increased their net long position by 6.48% within the market, to register a new net long position of 47,375 Lots on the day.

Over the same week, the Non-Commercial Speculative decreased their net short position by 37.58% within the market over the week of trade leading to Tuesday 19th September 2023: to register a new net short position of 15,625 lots, which is the equivalent of 4,429,618 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 increase by 5,665 bags yesterday, to register these stocks at 446,518 bags, with 98.35% of these certified stocks being held in, Europe at a total of 439,160 bags and the remaining 1.65% being held in the USA at a total 7,358 Bags. Of this, a total 135,302 bags, or 30.30% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 64.49% 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 yesterday to register this at 37.99 usc/Lb. This equates to 25.53% price discount for the London Robusta coffee.

It was a softer day overall on the commodity markets yesterday, as the US Dollar index was up 0.3% against a basket of other currencies. A stronger US Dollar is seen to be a bearish factor for commodities traded in other currencies. The Corn, Soybean and Wheat markets ended the day on a positive note, while the Coffee, Cocoa, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.220 Sterling, at 1.059 the Euro and with the US Dollar buying 4.970 Brazil Real.

The New York market started the day yesterday trading to the north of par on a very modest firmer note, while the London market stated the day trading on a softer note respectively, the markets were continued to oscillate around par for the remainder of the morning session. As the afternoon progressed the volume increased in the two front months with speculative selling returning to the New York floor to trigger stops along the way. The London market followed suit and the markets continued to project lower with a measure of speculative long liquidation to accentuate the losses for the day’s trade. The selling activity started to wane toward the end of the days’ trade, to see the New York market narrowly recover some of the earlier losses of the day, while the London market was seen to also settle near to the lows of the day, on a softer note at the close.

The London market ended the day on a negative note with 90% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 78.33% of the earlier losses of the day intact. This follow through softer close for the markets and with both the New York and the London markets retaining most of the earlier losses to settle near to the lows of the day, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:

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

NOV   2443 – 18                                         DEC    148.80 – 2.35
JAN    2344 – 25                                         MAR   149.90 – 2.35
MAR  2293 – 26                                         MAY    150.80 – 2.45
MAY  2268 – 25                                         JUL      151.60 – 2.50
JUL    2256 – 24                                         SEP      152.15 – 2.45
SEP    2245 – 25                                         DEC     153.15 – 2.55
NOV  2237 – 25                                         MAR    154.50 – 2.50
JAN   2229 – 25                                         MAY     155.90 – 2.15