Coffee Market Report

The Brazilian Association of the Soluble Coffee Industry ABICS have reported that soluble coffee consumption from the world's largest coffee producer has increased by 5.30% during the first quarter of 2024 to total an equivalent 87,250 bags when compared to the same time in the previous year. The Brazilian Coffee Industry Association ABIC, have assessed the domestic coffee market in Brazil to have increased by 1.64% in volume over the November 2022 to October 2023 period, having assessed consumption to have been 21.70 million bags. This number is a little lower than many had expected which in volume terms would nevertheless indicate that with a dedicated export consumer market demand for conservatively 40 million bags of Brazil coffee per annum, there is a need for Brazil to produce at least a minimum of 61.50 million bags of coffee production consistently per year, in order to fuel both domestic and export consumer market demand.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 7,680 bags yesterday, to register these stocks at 647,530 bags, with 99.68% of these certified stocks being held in, Europe at a total of 645,445 bags and the remaining 0.32% being held in the USA at a total 2,085 Bags. Of this, a total 304,380 bags, or 47.01% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.59% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 2,800 bags; to register 57,864 bags pending grading on the day.

The July 2024 to July 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 35.11 Usc/Lb. This equates to 15.83% price discount for the London Robusta coffee.

It was a mixed but overall firmer day on the commodity markets yesterday, with the leading in influence Oil markets firmer on the day. The Corn, Sugar, Soybean, Wheat, Silver and Palladium markets ended the day on a positive note, while the Coffee, Cocoa, Gold and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.245 Sterling, at 1.070 the Euro and with the US Dollar buying 5.132 Brazil Real.

The New York and London markets started the day yesterday trading to the north of par on a firmer notes respectively, both markets made gains during the early morning session to set highs for the day. The markets encountered resistance during the morning session to drop back from the early highs and trend towards par. The markets oscillated around par for the remainder of the morning session, before attracting some degree of selling pressure and both New York and London markets fell below par, to trend softer during the late morning session. As the afternoon progressed, speculative selling returned to the New York floor to trigger stops along the way. The floor established and buyer support returned to rebound from the earlier lows and recover some of the earlier losses. The London market followed suit to drop lower, pressured by technical selling activity. The New York market, trading in a range on the day, was pressured lower late in the day as sellers returned to the floor, this would see the market settle on a softer note at the close. The London market followed suit to likewise settle on a softer note at the close.

The London market ended the on a negative note with 28.07% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 78.38% of the earlier losses of the day intact. This follow through softer close for the markets, with the New York market settling near to the lows of the day to maintain most of the earlier losses of the day does little to inspire confidence and one might think that the markets are due for little better than a follow through hesitant start to early trade today, against the prices set yesterday, as follows:

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

JUL     4117 – 16                                         JUL     221.85 – 5.80
SEP     4044 – 21                                         SEP     220.10 – 5.65
NOV   3924 – 35                                         DEC    218.60 – 5.35
JAN    3783 – 48                                         MAR   218.00 – 5.25
MAR  3694 – 52                                         MAY   216.95 – 5.25
MAY  3648 – 45                                         JUL     215.70 – 5.25
JUL    3573 – 45                                         SEP     213.60 – 5.25
SEP    3514 – 45                                         DEC    211.30 – 5.35