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 2.43% within the market over the week of trade leading to Tuesday 6th February 2024: to register a new long position of 34,940 lots, which is the equivalent of 9,905,335 bags. This net long position has most likely been marginally increased 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 marginally increase their net long position by 0.41% within the market over the week of trade leading to Tuesday 6th February 2024: to register a new net long position of 44,298 Lots which is the equivalent of 7,383,000 bags. This net long position has most likely been increased following the period of firmer trade that has since followed.
The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of January were 45.40% higher than the same month last year, to total 3.67 million bags, this number made up of 3.21 million bags of arabica coffee up 31.10% from the same month last year and 457,787 bags of Conilon robusta coffee up 503.50% 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 seven months of the current July 2023 to June 2024 Brazil coffee year, to be 29.91% higher, overall, when compared to the same time in the previous coffee year, at a total of 25.97 million bags.
It is Brazil Carnival holidays this week, that is traditionally a quiet week of trade for Brazil and in this prevailing environment likely to see trade within this largest producer and exporter of coffee to consumer markets, somewhat muted for the days to come.
Vietnamese robusta coffee farmers and exporters have been off the field of play for the past week as they celebrate their Tet New Year which has brought in the Year of the Dragon. One might think that internal trade within Vietnam may remain relatively slow for the remainder of the week as many market players gradually start to return from holiday on Wednesday the 14th February.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 8,243 bags on Friday, to register these stocks at 297,795 bags, with 98.39% of these certified stocks being held in, Europe at a total of 292,990 bags and the remaining 1.61% being held in the USA at a total 4,805 Bags. Of this, a total 104,332 bags, or 35.03% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 40.21% of these certified coffees, originating from Honduras. There was meanwhile a 34,580 bags decrease to the number of bags pending grading to the exchange; to register 30,534 bags pending grading on the day.
The March 2024 to March 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 44.39 Usc/Lb. This equates to 22.61% price discount for the London Robusta coffee.
It was a mixed but overall softer day on the commodity markets on Friday, with comments made by the US Federal Reserve on Friday indicating that they want to see more evidence that inflation is projected to continue to decline before starting with their rate cutting cycle. The Coffee, Cocoa, Sugar and Wheat markets ended the day on a positive note, while the Corn, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.263 Sterling, at 1.079 the Euro and with the US Dollar buying 4.954 Brazil Real.
The New York market started the day on Friday pressured lower by selling early in day, while the London market started the day continuing through momentum from the close on Thursday. This saw the support start to build to see the markets moving above par throughout the remainder of the morning session. The New York market registered a firmer trajectory, gaining support throughout the session, with the London market following suit. This saw the market track upward as speculative buying support returned to the floor. As the afternoon progressed, the New York and London markets continued to gain momentum, 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 marginally limit the sessions gains. The New York market settled near to the highs of the day on a very firm note, following a technical rally in light of the prompt month options expiry on the 9th February as well as first notice day approaching on the 21st February. 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 94.55% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 91.46% 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, might see the markets set for a follow through steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 3349 + 104 MAR 196.30 + 7.50
MAY 3217 + 108 MAY 191.50 + 5.65
JUL 3118 + 94 JUL 190.20 + 5.05
SEP 3038 + 88 SEP 189.90 + 4.65
NOV 2961 + 70 DEC 189.65 + 4.15
JAN 2911 + 59 MAR 189.60 + 3.70
MAR 2886 + 59 MAY 189.85 + 3.90
MAY 2869 + 59 JUL 189.75 + 3.85
