Coffee Market Report
In the latest round of independent forecast updates, the analysts Safras & Mercado reported that for the next Brazil July 2024 to June 2025 coffee year, production is expected to be at a level between 69 and 71 million bags. This figure around 5.03% higher than the current July 2023 to June 2024 coffee year, for which production is estimated at 66.65 million bags. The report forecasts that Arabica production will see an estimated 6.90% increase to total between 46 and 47 million bags when compared to the previous coffee year and that Conilon Robusta production will see a comparative marginal 1.51% increase when compared to the previous coffee year, to total between 23 and 24 million bags.
The Indonesian government trade data from Sumatra, the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of October were 275,337 bags or 50.87% lower than the same month last year, at a total of 265,930 bags. This contributes to the islands cumulative robusta coffee exports for the first seven months of the current April 2023 to March 2024 coffee year to be 1,002,264 bags or 38.62% lower than the same period in the previous year, and a total 1,592,838 bags. Indonesia was forecast to produce around 8.50 million bags robusta coffee in 2023/24 coffee year, this figure 16.50% lower than 2022/23 coffee year. The local domestic and relatively well-developed coffee consumer and value add market, is likely to continue to absorb greater percentages of this island nation’s local production, resulting in lower export figures as reflected in the first six months of the coffee year.
The certified washed arabica coffee stocks held against the New York Exchange continue to register drawdowns, to register at 224,066 bags yesterday. This marks a drawdown of 165,072 bags during the month of November 2023. This is historically low and is interpreted by the speculative sector of the markets, as an indication of arabica coffee availability, or lack thereof, in the consumer markets where these exchange certified coffee stocks are held. One might comment however, that the new Colombia and Central America coffee year October 2023 to September 2024 harvests are currently underway, while there are reports that are somewhat unusual to indicate that there are coffee stocks still being held in Central America to carry over into the new crop year, thus possibly a matter of time before the arabica certified stocks begin to register further activity in increases of coffee to the pending grading stocks in the months ahead.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 35,734 bags yesterday, to register these stocks at 224,066 bags, with 97.80% of these certified stocks being held in, Europe at a total of 219,138 bags and the remaining 2.20% being held in the USA at a total 4,928 Bags. Of this, a total 33,572 bags, or 14.98% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 71.52% of these certified coffees, originating from Honduras. There was meanwhile a 2,685 bags decrease to the number of bags pending grading to the exchange; to register 23,870 bags pending grading on the day.
The January 2024 to March 2024 contract arbitrage between the London and New York markets widened yesterday to register this at 66.27 Usc/Lb. This equates to 35.88% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets yesterday, with the leading in influence Oil markets firmer on the day. The Coffee, Corn, Wheat and Silver markets ended the day on firmer note, while the Cocoa, Soybean, Sugar, Gold, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.264 Sterling, at 1.090 the Euro and with the US Dollar buying 4.926 Brazil Real.
The New York and London markets started the day yesterday trading north of par on a modest firmer note. This early support continued for the remainder of the morning session. The New York market tracked firmer, gaining support throughout the session, with the London market following suit. This saw the markets continue to track upward as speculative buying support was seen to continue. As the afternoon progressed, the New York and London markets continued to gain momentum to rally late in the day around the opening of business day in the Americas’, heavy volumes of trade, both markets continued to move in a firmer direction accentuating the gains for the day. The upward momentum brought sellers back to the floor at the top of the day, and both New York and London markets hit a ceiling very late in the day to limit the sessions gains. The New York market settled near to the highs of the day on a very firm note, while the London market followed suit to likewise settle on a very firm note, near to the highs of the day.
The London market ended the day on a positive note with 88% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 90.91% of the earlier gains of the day intact. . This very firm close for the markets, with both the New York and London markets tracking upward throughout the session to settle near to the highs, to possibly see the markets set for a follow through steady start in early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 2611 + 88 MAR 184.70 + 12.00
MAR 2546 + 78 MAY 180.75 + 10.70
MAY 2503 + 69 JUL 180.70 + 10.25
JUL 2463 + 66 SEP 181.50 + 10.05
SEP 2434 + 66 DEC 183.20 + 10.00
NOV 2416 + 62 MAR 185.15 + 10.00
JAN 2403 + 60 MAY 185.95 + 9.95
MAR 2394 + 60 JUL 186.75 + 9.95
