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 240,974 bags, with 97.73% of these certified stocks being held in, Europe at a total of 235,491 bags and the remaining 2.27% being held in the USA at a total 5,483 Bags. Of this, a total 39,782 bags, or 16.51% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 68.14% of these certified coffees, originating from Honduras. There was meanwhile a 2,670 bags increase to the number of bags pending grading to the exchange; to register 23,374 bags pending grading on the day.

The Certified Robusta coffee stocks held against the London Exchange were seen to decrease by 32,333 bags during the week up to the 11th December 2023, to register a total of 578,667 bags.

The January 2024 to March 2024 contract arbitrage between the London and New York markets widened yesterday to register this at 61.56 Usc/Lb. This equates to 32.63% price discount for the London Robusta coffee.

It was a firmer day on the commodity markets yesterday, with the U.S. Federal Reserve holding interest rates steady yesterday. A near unanimous 17 of 19 Fed officials project the policy rate will be lower by the end of 2024 than it is now, with the median projection showing the rate falling three-quarters of a percentage point. The Coffee, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on firmer note, while the Cocoa, Corn, Soybean and Wheat 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 4.919 Brazil Real.

The New York and London markets started the day yesterday trading to the north of par on firmer notes respectively. Both markets attracted buying support during the early morning session to track mildly firmer for the remainder of the morning session to gain momentum, as support was seen to build. As the afternoon progressed the New York market hit a ceiling to limit the gains for the day with sellers returning to the floor. This saw the New York market drop back from the earlier highs and trend back towards par. The London market followed suit albeit to gain momentum late in the day. The markets continued a firmer path carrying upward momentum into the afternoon session. The London market dropped back from the highs of the day late in the session to settle on a firmer note, while the New York market settled on a likewise firmer note at the close, albeit back from the highs of the day.

The London market ended the day on a positive note with 47.25% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 49.25% of the earlier gains of the day intact. This firmer close for the markets, might provide some degree of support and direction, albeit that the New York and London markets fell back from the highs of the day during the session, to possibly see the markets set for a follow through steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                       NEW YORK USC/LB.

JAN 2802 + 43                                                  MAR 188.65 + 3.40
MAR 2769 + 45                                                MAY 185.30 + 2.80
MAY 2715 + 38                                                JUL 185.25 + 2.50
JUL 2664 + 29                                                  SEP 186.05 + 2.35
SEP 2614 + 16                                                  DEC 187.25 + 2.15
NOV 2586 + 6                                                  MAR 189.00 + 1.85
JAN 2563 + 1                                                   MAY 189.80 + 1.70
MAR 2553 + 1                                                 JUL 190.50 + 1.65