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 4.77% within the market over the week of trade leading to Tuesday 12th. December 2023: to register a new long position of 17,268 lots, which is the equivalent of 4,895,401 bags. This net long position has most likely been increased further following the period of mixed but overall 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 decrease their net long position by 4.02% within the market over the week of trade leading to Tuesday 12th. December 2023: to register a new net long position of 32,047 Lots which is the equivalent of 5,341,167 bags. This net long position has most likely been increased following the period of firmer trade that has since followed.
The largest robusta coffee cooperative in Brazil, Cooabriel reported on Friday that above average temperatures and drier than normal weather conditions in the main growing regions of Espirito Santo may have a negative impact on production for the coming July 2024 to June 2025 coffee year. The estimates of this crop coming in at a median average 22 million bags Conilon robusta coffee. Weather reports indicate rains to come during the next two weeks, which will likely assist in improving this outlook as well as soil moisture levels in these key growing regions. Meanwhile, the Monetary Policy Committee from The Central Bank continues to be under pressure to reduce the high Selic rate of 11.75%, after recently released economic data has shown inflation is cooling although still needing to be monitored.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday, to register these stocks at 242,399 bags, with 97.74% of these certified stocks being held in, Europe at a total of 236,916 bags and the remaining 2.26% being held in the USA at a total 5,483 Bags. Of this, a total 40,107 bags, or 16.54% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 67.74% of these certified coffees, originating from Honduras. There was meanwhile a 4,010 bags increase to the number of bags pending grading to the exchange; to register 30,890 bags pending grading on the day.
The January 2024 to March 2024 contract arbitrage between the London and New York markets narrowed on Friday to register this at 59.71 Usc/Lb. This equates to 31.54% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets on Friday, with the leading in influence Oil market softer on the day. The London Robusta Coffee, Corn, Sugar, Soybean, Wheat and Palladium markets ended the day on firmer note, while the New York Arabica Coffee, Cocoa, Gold, Silver and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.269 Sterling, at 1.091 the Euro and with the US Dollar buying 4.941 Brazil Real.
The New York and London markets started the day on Friday trading to the north of par respectively. The New York market continued to oscillate to either side of par as the morning progressed, with the London market following suit. As the afternoon progressed the London market found support to trend in a firmer direction, while the New York market was seen to drop back from the modest highs of the morning session and trend in a softer direction. The late afternoon session saw the London market drop back from the earlier highs and settle on a firmer note at the close, with open interest on the prompt month in London a hefty 16,426 lots on 15th December, ahead of first notice day on Friday this week. The New York market continued on a softer path before finding support near to the lows of the day to rebound and recover most of the earlier losses of the day to settle on a softer note at the close.
The London market ended the day on a positive note with 46.38% of the earlier gains of the day intact, while the New York market ended the day on a modest negative note with 45.61% of the earlier losses of the day intact. This mixed close for the markets, albeit that the New York market recovered most of the earlier losses of the day to settle near on a modest softer note, does little to indicate direction and one might think that the markets are due for a follow through hesitant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 2857 + 32 MAR 189.30 – 1.30
MAR 2825 + 28 MAY 186.80 – 0.45
MAY 2762 + 21 JUL 187.05 – 0.05
JUL 2707 + 16 SEP 187.85 + 0.05
SEP 2658 + 18 DEC 189.05 + 0.10
NOV 2637 + 19 MAR 190.70 + 0.05
JAN 2615 + 20 MAY 191.40 – 0.05
MAR 2604 + 20 JUL 192.00 – 0.10
