Coffee Market Report
In the latest round of independent forecast updates, Rabobank has come forth to report that they foresee that the global coffee balance sheet will record a 4.50 million bag surplus for the 2024/2025 coffee year. This is based on improved production figures that are anticipated to come from both Brazil and Colombia. This follows their summary of the 2023/2024 year, which is estimated at a total global coffee production of 171.10 million bags versus global coffee demand at a steady 170.60 million bags, with global inventories aside, reflects a marginal coffee surplus of 500,000 bags for the 2023/2024 year.
Following the low and slow registrations of coffee to come to the certified warehouses of the exchange during 2023, there have been a gradual daily registrations of new volumes of arabica coffees tendered to the exchange as well coffees that are in the pipeline to be delivered to the Intercontinental Exchange (ICE) warehouse in Europe, potentially to be graded and enter the exchanges certified stocks. The latest report states that the main origins pending grading are 55,501 bags of Brazilian coffee along with a further 34,310 bags of coffee from Peru waiting to be graded.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 15,880 bags yesterday, to register these stocks at 532,266 bags, with 99.32% of these certified stocks being held in, Europe at a total of 528,651 bags and the remaining 0.68% being held in the USA at a total 3,615 Bags. Of this, a total 280,518 bags, or 52.70% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 22.13% of these certified coffees, originating from Honduras. The pending grading stocks were seen to decrease by 36,243 bags; to register 118,387 bags pending grading on the day.
The May 2024 to May 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 30.91 Usc/Lb. This equates to 16.89% price discount for the London Robusta coffee.
It was a softer day on the commodity markets yesterday, as the dollar strengthened with the Federal Reserve due to announce its interest rate stance at the end of the U.S. central bank's two-day policy meeting, later today. The Coffee, Corn, Wheat markets ended the day on a positive note, while the Cocoa, Sugar, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.272 Sterling, at 1.087 the Euro and with the US Dollar buying 5.031 Brazil Real.
The New York and London markets started the day yesterday trading north of par on firmer notes respectively. This support was short lived as the markets quickly attracted some degree of selling pressure to trend softer and trade back through par. The markets continued on a softer track for the remainder of the early morning session. As the afternoon progressed the New York market continued to trend softer, back from the early highs of the day to hit a floor, limit the losses and see the market track back upward as speculative buying support returned to the floor. The New York and London markets continued to gain momentum to rally late in the day around the opening of business day in the Americas’, modest volumes of trade, 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 the New York market hit a ceiling very late in the day to limit the sessions gains. The New York market settled on a firmer note at the close, while the London market dropped back from the highs to settle on a modest firmer note at the close.
The London market ended the day on a positive note with 52.38% of the earlier gains of the day intact, while the New York market ended the day on a positive note with 81.25% of the earlier gains of the day intact. This firmer close for the markets, with the New York and London markets recovering all of the earlier losses of the day to track firmer during the late afternoon session to see the New York market maintain most of the earlier gains of the day, one might think that the markets are possibly set for a steady follow through start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAY 3354 + 11 MAY 183.05 + 1.30
JUL 3260 + 15 JUL 181.80 + 1.20
SEP 3187 + 15 SEP 181.45 + 1.20
NOV 3110 + 16 DEC 180.95 + 1.10
JAN 3044 + 13 MAR 181.00 + 1.00
MAR 3002 + 20 MAY 181.30 + 1.00
MAY 2964 + 37 JUL 181.35 + 1.05
JUL 2909 + 47 SEP 181.25 + 1.00
