Coffee Market Report

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 1.33% within the market over the week of trade leading to Tuesday 26th March 2024: to register a new net long position of 42,689 Lots which is the equivalent of 7,114,833 bags. This net long position has most likely been increased further following the period of mixed but overall firmer trade that has since followed.

The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of March were 75,798 bags or 11.96% higher than the same month last year, at a total of 709,782 bags. This they say has contributed to the cumulative coffee exports for first six months of the current October 2023 to September 2024 coffee year to be around 74,778 bags or 3.71% lower than the same period in the previous coffee year, at a total of 1,936,281 bags. The institute expects that exports from the current October 2023 to September 2024 crop year are forecast to be 6.60% lower than the previous October 2022 to September 2023 year, to reach a total of 4.98 million bags.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to remain unchanged yesterday, to register these stocks at 595,209 bags, with 99.65% of these certified stocks being held in, Europe at a total of 593,124 bags and the remaining 0.35% being held in the USA at a total 2,085 Bags. Of this, a total 314,169 bags, or 52.78% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 19.36% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 6,415 bags; to register 80,296 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 34.00 Usc/Lb. This equates to 17.73% price discount for the London Robusta coffee.

Following the closure of the markets for the long weekend national holiday celebrations in many countries on Friday, the London commodity markets remained closed for the day yesterday, to leave the U.S. markets to trade solo for the day. The New York Arabica Coffee, Cocoa, Sugar and Gold markets ended the day on a positive note, the Silver market remained unchanged on the day, while the Corn, Soybean, Wheat, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.254 Sterling, at 1.073 the Euro and with the US Dollar buying 5.055 Brazil Real.

The New York market traded solo yesterday and started the day trading on a softer note, pressured lower from the close on Thursday last week. The market quickly found support near to the early lows of the day to rebound and trend in a firmer direction for the remainder of the morning session. As the afternoon progressed the New York market continued to build momentum, making gains throughout the day. This saw the market hit a ceiling during the late afternoon session to drop back from the day high to settle on a firmer note, with most of the day's gains intact at the close.

The London market ended the day on Thursday on a negative note with 89.89% of the earlier losses of the day intact, while the New York market ended the day yesterday on a firmer note, with 76.62% of the earlier gains of the day intact. This firmer close for the New York market trading solo for the day, might inspire some degree of follow through confidence and direction and with first notice approaching in New York for the prompt month in three-weeks’ time, on 22nd. April, one might think that the markets may possibly be set for a steady start to early trade today, against the prices set in New York yesterday and in London on Thursday, as follows:

LONDON ROBUSTA US$/MT NEW YORK USC/LB.
Close: 28/03/2024 Close: 01/04/2024

MAY 3479 – 80 MAY 191.80 + 2.95
JUL 3396 – 71 JUL 191.10 + 3.05
SEP 3319 – 66 SEP 190.70 + 3.10
NOV 3233 – 62 DEC 190.25 + 3.20
JAN 3158 – 52 MAR 190.60 + 3.10
MAR 3096 – 59 MAY 191.10 + 2.90
MAY 3038 – 65 JUL 191.20 + 2.75
JUL 2958 – 65 SEP 190.80 + 2.80