Coffee Market Report

The certified washed arabica coffee stocks held against the New York Exchange continue to register gradual daily increases, climbing from more than twenty-year lows recorded earlier in the year, to register a still comparatively low 450,727 bags yesterday. This marks a drawdown of 328,725 bags or 42.17% from the same time last year when the certified washed arabica coffee stocks registered 779,452 bags on 12th March 2023. In comparison, these certified washed arabica stocks have increased by 122,735 bags or 37.42% over the last two weeks, with the number of bags pending grading to the exchange registered at 180,423 yesterday. Its is the first time since October 2023 that the certified stocks are back above 400,000 bags. The new registrations coming mainly from Brazil with a small percentage of registrations coming from Peru.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 19,570 bags yesterday, to register these stocks at 450,727 bags, with 99.05% of these certified stocks being held in, Europe at a total of 446,472 bags and the remaining 0.95% being held in the USA at a total 4,255 Bags. Of this, a total 224,928 bags, or 49.90% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 26.46% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 3,130 bags; to register 180,423 bags pending grading on the day.

The Certified Robusta coffee stocks held against the London Exchange were seen to increase by 3,833 bags during the week up to the 8th March 2024, to register a comparatively low total of 405,333 bags, with Brazil Conillon accounting for 90% of coffee held against the London Exchange. This is 826,500 bags or 67.09%, lower than the same time last year.

The May 2024 to May 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 35.90 Usc/Lb. This equates to 19.31% price discount for the London Robusta coffee.

It was a mixed day on the commodity markets yesterday, as newly released economic data in the USA saw CPI figures increase during February. Investors will be looking ahead to the next US Federal Reserve policy meeting due to be held on the 20th March. The Coffee, Cocoa, Corn, Sugar, Soybean and Wheat markets ended the day on a positive note, while the Corn, Gold, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.279 Sterling, at 1.093 the Euro and with the US Dollar buying 4.969 Brazil Real.

The New York market started the day yesterday trading on a softer note, to extend the losses from the close on Monday, while the London market started the day trading on a firmer note. Both markets attracted support during the early morning session to track mildly firmer for the remainder of the morning session before gaining momentum, as support was seen to build during the late morning session. As the afternoon progressed the New York market hit a ceiling to limit the gains for the day with sellers returning to the floor. The New York market was weighed lower before finding support late in the day to see the market rally and gain momentum quickly. The London market continued a firmer path carrying upward momentum into the afternoon session. The London market dropped back from the late afternoon highs to settle on a firmer note, while the New York market rally saw the market recover to maintain some of the earlier gains and settle on a firmer note at the close.

The London market ended the day on a positive note with 50% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 31.03% of the earlier gains of the day intact. This firmer close for the markets, might provide some degree of support and direction, albeit that both the New York and the London markets fell back from the highs of the day during session, one might think that the markets are due for a follow through hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

MAY   3307 + 28                                        MAY   185.90 + 0.90
JUL     3198 + 23                                        JUL     184.10 + 0.95
SEP     3126 + 23                                        SEP     183.65 + 1.15
NOV   3047 + 24                                        DEC    183.45 + 1.15
JAN    2983 + 26                                        MAR   183.65 + 1.20
MAR  2937 + 26                                        MAY    183.95 + 1.30
MAY  2909 + 26                                        JUL      183.85 + 1.30
JUL    2886 + 26                                        SEP      183.35 + 1.20