Coffee Market Report

The weather in Brazil will continue to be monitored throughout the month of April, with good levels of rainfall reported across the main coffee growing areas during the latter stages of March and early April. Weather forecasters are predicting rainfall to continue during the month of April, which would be considered seasonally normal for this time of year. The Conillon robusta crop has begun harvest in some areas, while internal prices surpassed 1,000 reais per 60 Kg Bag for the first time ever yesterday, according to the National Research Centre CEPEA. This in an environment where the London Futures Market hit a record high during trade yesterday, whilst farmers who are relatively well financed, continue to be measured sellers in an environment where robusta demand remains high.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 12,603 bags yesterday, to register these stocks at 616,682 bags, with 99.66% of these certified stocks being held in, Europe at a total of 614,597 bags and the remaining 0.34% being held in the USA at a total 2,085 Bags. Of this, a total 318,762 bags, or 51.69% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 18.64% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 5,237 bags; to register 73,888 bags pending grading on the day.

The May 2024 to May 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 30.69 Usc/Lb. This equates to 15.07% price discount for the London Robusta coffee.

It was firm day on the commodity markets yesterday, with many of the commodities continuing to gain momentum throughout the day. This saw the Gold price set a new record high for the second consecutive session. This follows comments by the US Federal Reserve Chair that lower monetary policy rates will be appropriate later this year. The Coffee, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Cocoa and Sugar markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.265 Sterling, at 1.084 the Euro and with the US Dollar buying 5.040 Brazil Real.

The New York market started the day trading to the south of par on a modest softer note before gaining traction and support to see the market trend firmer early in the day, whilst the London market started the day yesterday trading to the north of par on a firm note, carrying through support from the close very positive close on Tuesday. The markets were seen to gain momentum, making gains throughout the morning session. As the afternoon progressed both the New York and London markets continued on a firmer trajectory, with activity picking up as the Americas came to the floor. This was seen to have the markets drop back from the early highs, pressured lower during the mid-afternoon session, albeit that this was short lived as the markets quickly reversed the trend to gain support once more and rally towards the close. The New York market made significant gains during the late afternoon session under heavy volumes of trade, with the London market continuing in a firmer direction towards the close. The New York market hit a ceiling late in the day to limit the day’s gains and see the market drop to settle on a very firm note at the close, whilst the London market settled on a very firm note, near to the highs of the day at the close.

The London market ended the on a very positive note with 85.14% of the earlier gains of the day intact, while the New York market ended the day on a likewise very firm note, with 62.23% of the earlier gains of the day intact. This follow through supportive close for the markets, albeit that the New York market fell back from the highs of the day during the late afternoon session continues to provide buoyancy and one might think that the markets are due for another steady start to early trade today, against the prices set yesterday, as follows:

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

MAY   3812 + 149                                      MAY   203.60 + 5.85
JUL     3727 + 147                                      JUL     202.80 + 5.70
SEP     3629 + 139                                      SEP     202.10 + 5.70
NOV   3520 + 132                                      DEC    201.25 + 5.65
JAN    3412 + 119                                      MAR   201.15 + 5.50
MAR  3324 + 118                                      MAY   200.85 + 5.10
MAY  3260 + 129                                      JUL     200.30 + 4.80
JUL    3176 + 129                                      SEP     199.55 + 4.60