Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net short position by 37.47% within the market over the week of trade leading to Tuesday 3rd. October 2023: to register a new net short position of 22,410 lots, which is the equivalent of 6,353,136 bags. This net short position has most likely been increased 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 decrease their net long position by 15.49% within the market over the week of trade leading to Tuesday 3rd. October 2023: to register a new net long position of 19,600 Lots which is the equivalent of 3,266,667 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.
The International Coffee Organisation ICO have reported that the global coffee exports for the month of August were 2.06% higher than the same month in the previous year, at a total of 10.30 million bags. This they say, has contributed to the cumulative global coffee exports for the first eleven months of the October 2022 to September 2023 coffee year to be 5.10% lower than the same period in the previous year, at a total of 114.01 million bags.
The International Coffee Organisation ICO have maintained their forecast for global coffee supply at 1.70% higher than the previous year at a total of 171.27 million bags for the October 2022 to September 2023 coffee year. The International Coffee Organisation have likewise maintained their forecast for global consumption for the October 2022 to September 2023 coffee year, to grow by 1.66% from the previous year to reach a total of 178.53 million bags. Therefore, the global coffee markets are indicated to have a coffee year deficit of 7.26 million bags heading into the October 2023 to September 2024 coffee year.
The ICO reported an increase in exports from Brazil during August, which registered a 24.40% increase in exports when compared to the same month in the previous year, to register 3.67 million bags during August. There was a comparative decrease in exports from Asia as Vietnam, India and Indonesia cumulatively registered a 14.90% decrease in exports, when compared to the same month in the previous year to total 2.72 million bags during August. Within the ICO report, exports for August were seen to have increased by 10.90% year on year from Africa to a total 1.37 million bags, driven primarily by a 48.40% increase in exports from Uganda.
The ICO report includes within the total global exports, the export figures, from Mexico and the traditional washed arabica Central American bloc; Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to report for August that exports were 2.00% lower than the same period in the previous year to total 1.26 million bags.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday, to register these stocks at 442,222 bags, with 98.37% of these certified stocks being held in, Europe at a total of 435,037 bags and the remaining 1.63% being held in the USA at a total 7,185 Bags. Of this, a total 133,835 bags, or 30.13% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 64.48% 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 on Friday to register this at 39.05 usc/Lb. This equates to 26.74% price discount for the London Robusta coffee.
It was a firmer day on the commodity markets on Friday, with the leading in influence Oil markets firmer on the day. The New York Arabica Coffee, Cocoa, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on firmer note, while the London Robusta Coffee, Corn, Soybean and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.219 Sterling, at 1.055 the Euro and with the US Dollar buying 5.146 Brazil Real.
The New York markets started the day on Friday trading on a modest firmer note, while the London market started the day, carrying through pressure from the close Thursday to trade to the south of par on a softer note, both markets continued to oscillate to either side of par during the early morning session. The late morning session saw the New York market gain momentum as support was driven by buying in the market, while the London market was seen to be pressured lower during the early session. As the afternoon progressed the markets gained support to recover from the early modest lows of the morning and trend firmer, the New York market buoyed by support in the market continued on a firmer trajectory before being capped late in the day to limit the day’s gains, this saw the market settle on a firmer note at the close, while the London market dropped back from the midafternoon highs to trend back towards par and to see the market settle on a firmer note at the close.
The London market ended the day on a negative note with 34.55% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 46.43% of the earlier gains of the day intact. This mixed close for the markets, with the London market recovering most of the earlier losses to settle near on a modest softer note and the New York market settling on a firmer note, might inspire some degree of follow through support to possibly see the markets set for a steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 2359 – 19 DEC 146.05 + 0.65
JAN 2280 – 22 MAR 147.20 + 0.80
MAR 2228 – 18 MAY 148.00 + 0.95
MAY 2209 – 16 JUL 148.85 + 0.95
JUL 2199 – 17 SEP 149.55 + 1.00
SEP 2183 – 17 DEC 150.65 + 0.95
NOV 2178 – 16 MAR 152.00 + 1.00
JAN 2169 – 12 MAY 153.05 + 0.95
