Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net long position by 10.13% within the market over the week of trade leading to Tuesday 20th February 2024: to register a new long position of 34,206 lots, which is the equivalent of 9,697,249 bags. This net long position has most likely been decreased further following the period of mixed but overall softer 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 4.24% within the market over the week of trade leading to Tuesday 20th February 2024: to register a new net long position of 43,952 Lots which is the equivalent of 7,325,333 bags. This net long position has most likely been decreased further following the period of softer trade that has since followed.
In a somewhat delayed release, the Ivory Coast have reported that their provisional coffee exports for the month of November 2023 were 27,383 bags or 83.98% lower than the same month last year, at a total of 5,217 bags. This has contributed to their country’s cumulative coffee exports for the first two months of the October 2023 to September 2024 coffee year to be 120,833 bags or 70.65% lower than the same period last year, at a total of 50,183 bags. The median estimate forecast for the current October 2023 to September 2024 coffee year from this robusta coffee producer nation is anticipated to reach 1.35 million bags or 28.57% larger than the previous 2022/2023 coffee year, thus one might expect to see coffee exports begin to increase as the coffee season progresses.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 8,330 bags on Friday, to register these stocks at 324,157 bags, with 98.52% of these certified stocks being held in, Europe at a total of 319,352 bags and the remaining 1.48% being held in the USA at a total 4,805 Bags. Of this, a total 120,814 bags, or 37.27% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 37.09% of these certified coffees, originating from Honduras. The pending grading stocks are registering daily increases and yesterday, there were a further 6,994 bags increase to the number of bags pending grading to the exchange; to register 127,421 bags pending grading on the day.
The May 2024 to May 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 42.86 Usc/Lb. This equates to 23.77% price discount for the London Robusta coffee.
It was a softer day on the commodity markets on Friday, with the US Dollar gaining strength against a basket of other currencies, a firmer Dollar is seen to be a bearish factor for commodities traded in other currencies. The Cocoa, Gold, Silver and Palladium markets ended the day on a positive note, while the Coffee, Corn, Soybean, Sugar, Wheat and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.267 Sterling, at 1.082 the Euro and with the US Dollar buying 4.994 Brazil Real.
The New York and London markets started the day on Friday pressured lower from the close on Thursday to see the markets continue to trade lower during the early morning session. Both the New York and London markets were seen to quickly encounter resistance during the early morning session to drop back below par and trend softer for the remainder of the morning session. As the afternoon progressed the volume increased, albeit in modest terms, to contribute to the day’s direction with speculative selling pressuring the New York market lower as stops were triggered along the way. The London market followed suit and the markets continued to project lower with a measure of speculative long liquidation to accentuate the losses for the day’s trade. The late afternoon session saw the markets rebound slightly off of the lows of the day to recover a small degree of losses, to settle on softer notes at the close, respectively.
The London market ended the day on a negative note with 82.78% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 78.08% of the earlier losses of the day intact. This follow through softer close for both New York and London markets, with both markets pressured lower throughout the session to settle near to the lows of the day with most of the losses intact, with First Notice Day against the London March 2024 position today, this does little to inspire confidence and one might 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.
MAY 3030 – 83 MAY 180.30 – 2.85
JUL 2971 – 85 JUL 179.05 – 3.05
SEP 2923 – 79 SEP 179.05 – 2.95
NOV 2877 – 74 DEC 179.35 – 3.05
JAN 2829 – 71 MAR 179.65 – 3.15
MAR 2796 – 76 MAY 180.00 – 3.25
MAY 2774 – 76 JUL 180.00 – 3.35
JUL 2755 – 76 SEP 179.80 – 3.35
