Coffee Market Report

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,926 bags yesterday, to register these stocks at 444,871 bags, with 98.38% of these certified stocks being held in, Europe at a total of 437,686 bags and the remaining 1.62% being held in the USA at a total 7,185 Bags. Of this, a total 134,405 bags, or 30.21% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 64.56% 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 widened yesterday to register this at 39.43 usc/Lb. This equates to 26.51% price discount for the London Robusta coffee.

It was a softer day on the commodity markets yesterday, with news filtering to the markets that US Jobs openings unexpectedly rose in August, which could indicate the need for the US Federal Reserve to look to further interest rate hikes in the near future. The Wheat and Silver markets ended the day on firmer note, while the Coffee, Corn, Cocoa, Sugar, Soybean, Gold, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.206 Sterling, at 1.046 the Euro and with the US Dollar buying 5.167 Brazil Real.

The New York market started the day trading to the south of par on a softer note, while the London market started the day yesterday trading on a modest firmer note. Both the New York and London markets attracted buying support early in the day to see the markets trend in a firmer direction setting a high for the day during the mid-morning session. The markets encountered resistance at the highs to drop back and trend towards par. As the afternoon progressed, speculative selling returned in volume to the New York floor to trigger stops along the way, the London followed suit and the markets continued to project lower with further long liquidation selling to accentuate the losses for the day’s trade. The selling activity started to wane toward the latter end of the afternoon session where the New York market found support to recover most of the earlier losses and settle on a near to unchanged note at the close. The London market recovered some of the earlier losses to settle on a softer note at the close.

The London market ended the day on a negative note with 78.46% of the earlier losses of the day intact, while the New York market ended the day on a negative note with 18.92% of the earlier losses of the day intact. This follow through softer close for the markets, does little to indicate direction albeit that the New York market recovered most of the earlier losses to settle near to unchanged for 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   2410 – 51                                          DEC   148.75 – 0.35
JAN    2332 – 42                                          MAR  149.70 – 0.40
MAR  2275 – 40                                          MAY  150.35 – 0.50
MAY  2245 – 38                                          JUL     151.15 – 0.55
JUL    2231 – 36                                          SEP     151.75 – 0.60
SEP    2216 – 33                                          DEC    152.75 – 0.50
NOV  2207 – 27                                          MAR   154.00 – 0.50
JAN   2194 – 25                                          MAY    155.05 – 0.55