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 long position by 7.61% within the market over the week of trade leading to Tuesday 28th. November 2023: to register a new long position of 13,450 lots, which is the equivalent of 3,813,015 bags. This net long position has most likely been increased further following the period of firmer trade that has since followed.
The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector increase their net long position by 7.14% within the market over the week of trade leading to Tuesday 28th. November 2023: to register a new net long position of 33,888 Lots which is the equivalent of 5,648,000 bags. This net long position has most likely been increased following the period of mixed but overall firmer trade that has since followed.
The Brazil government have reported preliminary data that illustrates the country’s green coffee exports for the month of November were 8.49% higher than the same month last year, at a total of 3.91 million bags. The official breakdown of coffee exports by description for November will soon be released and can be anticipated to illustrate this figure more accurately.
The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of November were 32,627 bags or 62.72% higher than the same month last year, at a total of 84,650 bags. This they say has contributed to the cumulative coffee exports for first two months of the current October 2023 to September 2024 coffee year to be around 16,629 bags or 17.91% higher than the same period in the previous coffee year, at a total of 109,494 bags. IHCAFE expects that exports from the current October 2023 to September 2024 crop year are forecast to be 6.60% lower than the previous October 2022 to September 2023 year, to reach a total of 4.98 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 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 3,115 bags increase to the number of bags pending grading to the exchange; to register 26,985 bags pending grading on the day.
The January 2024 to March 2024 contract arbitrage between the London and New York markets widened on Friday to register this at 67.69 Usc/Lb. This equates to 36.72% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets on Friday, after comments from the US Federal Reserve increased the markets confidence that central bank had completed its monetary policy tightening cycle and could start cutting rates during the first quarter of next year. The Corn, Wheat, Gold, Silver and Platinum markets ended the day on firmer note, while the Coffee, Cocoa, Soybean, Sugar and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.267 Sterling, at 1.087 the Euro and with the US Dollar buying 4.880 Brazil Real.
The New York market started the day on Friday trading to the north of par on a firmer note, while the London market started the day trading on a softer note. The markets oscillated around par for the remainder of the early morning session, before attracting some degree of selling pressure to see both the New York and London markets drop below par and trend softer during the morning session. As the afternoon progressed, speculative selling returned in volume to the New York floor to trigger stops along the way before finding support to rebound from the earlier lows and recover most of the earlier losses. The London followed suit to drop lower, pressured by selling activity. The New York market was seen to find support late in the day to trend back towards par, and to settle on a modest near to unchanged softer note at the close, while the London market followed suit to likewise recover most of the earlier losses to settle on a modest softer note at the close.
The London market ended the day on a negative note with 59.09% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 5.38% of the earlier losses of the day intact. This softer close for the markets, albeit that both the New York and London markets recovered some of the earlier losses of the day to settle in softer territory, might indicate some degree of direction and one might therefore think that the markets are due for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 2572 – 39 MAR 184.35 – 0.35
MAR 2528 – 18 MAY 181.70 + 0.95
MAY 2490 – 13 JUL 182.10 + 1.40
JUL 2457 – 6 SEP 182.90 + 1.40
SEP 2431 – 3 DEC 184.45 + 1.25
NOV 2414 – 2 MAR 186.30 + 1.15
JAN 2399 – 4 MAY 187.10 + 1.15
MAR 2390 – 4 JUL 187.80 + 1.05
