Coffee Market Report

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged 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 38.26 usc/Lb. This equates to 25.63% price discount for the London Robusta coffee.

It was a softer day overall on the commodity markets yesterday, as the US Dollar strengthened against a basket of other currencies on the back of news that the US Federal Reserve may look to extend interest rate hikes. A stronger US Dollar is seen to be a bearish factor for commodities traded in other currencies. The Corn, Sugar and Soybean markets ended the day on a positive note, while the Coffee, Cocoa, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.213 Sterling, at 1.050 the Euro and with the US Dollar buying 5.044 Brazil Real.

The New York markets started the day yesterday trading on a modest softer note, while the London market started the day yesterday trading to the north of par on a firmer note. Both markets continued to oscillate to either side of par for the remainder of the early morning session before attracting some degree of selling pressure to see the markets trend below par during the later morning session. As the afternoon progressed, the New York and London markets continued to trend in a softer direction, weighed by selling in the markets. The markets hit a floor during the mid-afternoon session, to rebound from the lows of the day. The selling pressure started to wane towards the end of the day’s trade, to see both the New York and London markets recover most of the earlier losses and settle on modest softer notes at the close.

The London market ended the day on a modest negative note with 30% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 48.48% of the earlier losses of the day intact. This softer close for the markets does little to indicate direction, albeit that both the New York and London markets recovered most of the earlier losses to settle on modest softer note, 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   2447 – 9                                            DEC    149.25 – 1.60
JAN    2346 – 6                                            MAR   150.35 – 1.55
MAR  2293 – 6                                            MAY   150.95 – 1.70
MAY  2268 – 6                                            JUL      151.75 – 1.60
JUL    2256 – 6                                            SEP      152.45 – 1.45
SEP    2245 – 5                                            DEC    153.50 – 1.35
NOV  2237 – 5                                            MAR   154.75 – 1.30
JAN   2229 – 5                                            MAY    156.00 – 1.10