Coffee Market Report

The certified washed arabica coffee stocks held against the New York Exchange continue to register gradual daily increases, climbing to levels close to the same time last year and up from more than twenty-year lows recorded earlier in the year, to register a still comparatively low 635,110 bags yesterday. This marks a drawdown of 73,202 bags or 10.33% from the same time last year when the certified washed arabica coffee stocks registered 708,312 bags on 18th April 2023. These daily released figures are received by the speculative sector of the markets, as an indication of arabica coffee availability, or lack thereof, in the consumer markets where these exchange certified coffee stocks are held. The daily registrations to the exchange might be interpreted as a bearish factor for the market, indicating an improvement in coffee flow to consumer markets.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 4,254 bags yesterday, to register these stocks at 635,110 bags, with 99.67% of these certified stocks being held in, Europe at a total of 633,025 bags and the remaining 0.33% being held in the USA at a total 2,085 Bags. Of this, a total 300,120 bags, or 47.25% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.93% of these certified coffees, originating from Honduras. The pending grading stocks were seen to decrease by 1,504 bags; to register 56,344 bags pending grading on the day.

The July 2024 to July 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 55.60 Usc/Lb. This equates to 24.06% price discount for the London Robusta coffee.

It was a firmer day on the commodity markets yesterday, with the leading in influence Oil market trending firmer on the day on the back of continued geopolitical tensions in the Middle East. The Cocoa, Sugar, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Coffee, Corn and Soybean markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.242 Sterling, at 1.064 the Euro and with the US Dollar buying 5.242 Brazil Real.

Brazil will celebrate Tiradentes Day on Sunday 21st April, which may see a few internal market players off the field of play on Monday, taking the opportunity to make it a long weekend.

The New York and London markets started the day yesterday trading on firmer notes respectively, with both markets making large gains during the very early session to set new highs for the day. The markets dropped back from the early highs to trade within a comparatively narrow firmer range for the remainder of the morning session. As the afternoon progressed the markets slipped lower with limited speculative buyer interest at the top of the early session day's gains, and in mostly technical trade, ahead of First notice day, sellers returned to the floor, and a continuation of spread activity, hefty volume recorded in the two front months to the day’s direction and further speculative selling returning to the New York floor to trigger stops 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 weaker Brazil Real to the US Dollar likely dampening sentiment within the earlier technically bullish speculative sector. The volatility in the markets doing little to inspire active participation from key producers, Brazil and Vietnam. As the day progressed to the close selling activity started to wane toward the end of the days’ trade, to see the London market narrowly recover some of the earlier losses of the day, while the New York market was seen to settle near to the lows of the day, on a softer note at the close.

The London market ended the on a negative note with 88.08% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 93.43% of the earlier losses of the day intact. This softer close for the markets and with both the New York and the London markets retaining most of the earlier losses to settle near to the lows of the day, ahead of first notice day on the prompt month in New York approaching on Monday, might indicate some degree of consolidation post 7 sessions of significant gains, albeit that there may still be volatility in the market, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:

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

MAY   4081 – 153                                      MAY    239.85 – 8.10
JUL     4062 – 133                                      JUL      231.10 – 9.25
SEP     3985 – 126                                      SEP      229.35 – 9.05
NOV   3884 – 116                                      DEC     227.55 – 8.90
JAN    3768 – 115                                      MAR    226.85 – 8.55
MAR  3683 – 118                                      MAY    225.90 – 8.10
MAY  3620 – 119                                      JUL      224.70 – 7.70
JUL    3545 – 119                                      SEP      222.60 – 7.30