Coffee Market Report

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of April was 176,000 bags or 31.09% higher than the same month last year, at a total of 742,000 bags. The National Coffee Growers Federation have reported that the country’s cumulative coffee production for the first seven months of the current October 2023 to September 2024 coffee year to be 1,000,000 bags or 16.16% higher the same period in the previous coffee year, at a total of 7,187,000 bags.

The National Coffee Growers Federation in Colombia have meanwhile reported that the country’s coffee exports for the month of April were 57,000 bags or 7.88% higher than the same month last year, at a total of 780,000 bags. The National Coffee Growers Federation have reported that the country’s cumulative coffee exports for first seven months of the current October 2023 to September 2024 coffee year are 205,000 bags or 3.09% higher than the same period in the previous coffee year, at a total of 6,834,000 bags.

Within Brazil, the torrential rainstorms in Brazil’s southernmost state of Rio Grande do Sul have caused the worst flooding the country has seen in 80 years. This region is some distance away from the coffee growing areas however the humanitarian and infrastructural damage caused has been great. Meanwhile, the Monetary Policy Committee from The Central Bank announced this week that the Selic rate will be cut by a further 0.25 basis points to 10.50%. This marks the seventh consecutive rate cut and it is expected that the Central Bank will continue to implement rat cuts in the months to come.

Today is the Ascension Day public holiday for many leading European countries but does not impact upon the USA and UK and the coffee markets. It is likely though in terms of physical trade and the significant consumer market share of the Western Europeans, to somewhat mute business for the day.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to decrease by 13,750 bags yesterday, to register these stocks at 687,673 bags, with 99.19% of these certified stocks being held in, Europe at a total of 682,084 bags and the remaining 0.81% being held in the USA at a total 5,589 Bags. Of this, a total 316,768 bags, or 46.06% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.33% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 1,085 bags; to register 119,937 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 42.69 Usc/Lb. This equates to 21.61% price discount for the London Robusta coffee.

It was a mixed day on the commodity markets yesterday, with fresh news from the European Central Bank who has indicated that their rate cutting cycle will begin in June this year, with the Bank of England’s monetary policy committed due to meet today, with many expecting interest rates to remain steady at this time. The Coffee, Cocoa, Silver and Platinum markets ended the day on a positive note, while the Corn, Sugar, Soybean, Wheat, Gold and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.249 Sterling, at 1.075 the Euro and with the US Dollar buying 5.090 Brazil Real.

The New York and London markets started the day yesterday trading on a softer notes respectively. Both markets attracted support during the early morning session to track mildly firmer for the remainder of the morning session before gaining momentum, as support was seen to build during the late morning session. As the afternoon progressed the New York market continued to trade to the north of par albeit that the market was pressured lower back towards par during the session. The London market followed suit to likewise trend in a firmer direction for the remainder of the day’s session. The New York market hit a ceiling late in the day to limit the gains for the day with sellers returning to the floor. The New York market dropped back from the highs late in the day, to settle on a firmer note at the close. The London market followed suit, to continue to trend firmer buoyed by support within the market, to encounter resistance late in the day and settle on a firmer note at the close.

The London market ended the day on a positive note with 50.70% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, with 52.94% of the earlier gains of the day intact. This firmer close for the markets, might provide some degree of support and direction, albeit that both the New York and the London markets fell back from the highs of the day a choppy session in a comparatively narrow range yesterday, one might think that the markets are due for 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     3414 + 36                                         JUL    197.55 + 0.90
SEP     3338 + 33                                         SEP    196.25 + 0.85
NOV   3259 + 33                                         DEC   195.00 + 0.75
JAN    3163 + 35                                         MAR  194.45 + 0.75
MAR  3078 + 29                                         MAY  194.00 + 0.80
MAY  3023 + 27                                         JUL    193.85 + 0.80
JUL    2965 + 26                                         SEP    193.65 + 0.90
SEP    2900 + 26                                         DEC   193.50 + 1.10