Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund increase their net long position by 2.60% within this market over the week of trade leading up to Tuesday 9th January 2024; to register a new long position at 42,143 Lots. The longer term in nature Index Fund sector of this market marginally decreased their net long position by 7.51% within the market, to register a new net long position of 59,222 Lots on the day.
Over the same week, the Non-Commercial Speculative increased their net long position by 11.63% within the market over the week of trade leading to Tuesday 9th January 2024: to register a new net long position of 25,179 lots, which is the equivalent of 7,138,135 bags. This net long position has most likely been little changed following the period of mixed sideways trade that has since followed.
The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of December were 30.58% higher than the same month last year, to total 3.78 million bags, this number made up of 3.26 million bags of arabica coffee up 15.19% from the same month last year and 526,974 bags of Conilon robusta coffee up 750.07% from the same month last year.
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first six months of the current July 2023 to June 2024 Brazil coffee year, to be 25.99% higher, overall, when compared to the same time in the previous coffee year, at a total of 22.30 million bags.
The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of December were 17,463 bags or 4.17% lower than the same month last year, at a total of 401,336 bags. Uganda Robusta exports registered a 1.68% increase when compared to the same month last year, to total 337,026 bags and Arabica exports registered a comparative 26.38% decrease when compared to the same month last year to total 64,310 bags exported in December 2023. The UCDA also reports that the cumulative exports for the first three months of the current October 2023 to September 2024 coffee year to be 22,936 bags or 1.73% lower than the same period in the previous year, at a total of 1,297,895 bags. The UCDA have reported that during the month of December, the overall value of coffee exports has been seen to have increased by 10.76% when compared to the same month in the previous year, to total 65.94 million US Dollars.
The Uganda coffee harvest and preparation for export has experienced extraordinary delays at the start of the main season with El Nino related heavy downpours during the harvest, delaying harvest, drying and delivery to the mills in the interior. The inclement weather has since improved and there are signs that coffee is starting to flow and may soon report increased exports to consumer markets, from this already lower year on year harvest. There has meanwhile been the development of the lack of access to the regular shipping route via the Red Sea to key consumer markets in northern Europe and Mediterranean countries, which is influenced by the geopolitical events in the area around the Suez Canal, and the decision by mainstream shipping lines to circumnavigate the Cape of Good Hope. This is likely to cause further delay for Uganda robusta and arabica coffees that are traditionally exported from Mombasa, Kenya and routed north through the Suez Canal. The backlog of shipments for all coffee supply that is ordinarily channelled through this shipping lane, along with many other consumer goods and commodities, from Indian Ocean countries exporting from Asia, Africa and the Middle East, will experience delays to reach the collectively largest consumer bloc countries in Europe and the UK are these coffees, to reach destination.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday, to register these stocks at 261,446 bags, with 97.91% of these certified stocks being held in, Europe at a total of 255,995 bags and the remaining 2.09% being held in the USA at a total 5,451 Bags. Of this, a total 56,270 bags, or 21.52% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 60.64% of these certified coffees, originating from Honduras. There was meanwhile, an increase of 13,001 bags in the number of bags pending grading to the exchange; to register 50,380 bags pending grading on the day.
The majority of commodity markets in the U.S.A. were closed yesterday for the Martin Luther King national holiday, which left the London Robusta Coffee market trading solo for the day.
The March 2024 to March 2024 contract arbitrage between the London and New York markets narrowed on Friday, to register this at 44.51 Usc/Lb. This equates to 24.73% price discount for the London Robusta coffee.
With most of the U.S.A. commodity markets off the field of player yesterday, the remaining open markets had a quiet day yesterday, but with the overall commodity index for these markets showing a degree of muscle. The London Robusta Coffee, Cocoa, Sugar, Gold and Platinum markets ended the day on a positive note, while the Silver and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.270 Sterling, at 1.093 the Euro and with the US Dollar buying 4.907 Brazil Real.
The London market trading solo for the day yesterday, started the day trading on a firmer note carrying through the momentum from the close on Friday. The London market continued to trend in a firmer direction, buoyed by support throughout the morning session. As the afternoon progressed the market was seen to hit a ceiling to limit the gains for the day, this saw the London market drop back from the earlier highs and settle into a range during the late afternoon session. The London market was seen to settle on a firmer note, following a modest volume day, at the close with most of the earlier gains for the day intact.
The London market ended the day yesterday on a positive note with 84.21% of the earlier gains of the day intact, while the New York market ended the day on Friday trading on a negative note with 80.20% of the earlier losses of the day intact. This firmer close for the London market trading solo for the day the day, might assist to indicate some degree of direction and provide support to see the markets set for a follow through steady start to early trade today, against the prices set in London yesterday and New York on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
Close: 15/01/2024 Close: 12/01/2024
MAR 2987 + 48 MAR 180.00 – 4.05
MAY 2862 + 48 MAY 177.35 – 3.65
JUL 2777 + 39 JUL 177.45 – 3.60
SEP 2721 + 34 SEP 178.10 – 3.60
NOV 2690 + 32 DEC 179.35 – 3.50
JAN 2663 + 33 MAR 181.00 – 3.45
MAR 2651 + 32 MAY 181.75 – 3.45
MAY 2642 + 32 JUL 182.45 – 3.45
