Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net long position by 7.70% within the market over the week of trade leading to Tuesday 14th. May 2024: to register a new long position of 40,005 lots, which is the equivalent of 11,341,240 bags. This net long position has most likely been little changed following the period of mixed but overall firmer sideways trade that has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector decrease their net long position by 8.95% within the market over the week of trade leading to Tuesday 14th. May 2024: to register a new net long position of 19,872 Lots which is the equivalent of 3,312,000 bags. This net long position has most likely been little changed following the period of mixed but overall firmer sideways trade that has since followed.
The United States Department of Agriculture USDA Global Agricultural Information Network have revised their estimate for the Costa Rican coffee Arabica coffee crop over the current October 2023 to September 2024 coffee year down by 17.99% to now reach a total of 1.18 million bags, reported to be due to an early and short harvest season along with sustained heavy rains during harvest. The unusually early, heavy rains in March 2023 promoted strong flowering in all coffee regions at the same time, rather than a typical cycle in which flowering advances gradually northward along with the beginning of the rainy season, allowing for a measured harvest in terms of timing.
The report further estimates production to remain steady during the coming October 2024 to September 2025 coffee year, estimated at 1.19 million bags, of which the report goes on to estimate 970,000 bags will be exported to consumer markets from the coming crop harvest. The year-on-year carryover stocks from the current October 2023 to September 2024 crop into the new October 2024 to September 2025 coffee year are put at 504,000 bags ahead of the new harvest to come.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 10,505 bags on Friday, to register these stocks at 760,383 bags, with 99.26% of these certified stocks being held in, Europe at a total of 754,794 bags and the remaining 0.74% being held in the USA at a total 5,589 Bags. Of this, a total 371,457 bags, or 48.85% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.15% of these certified coffees, originating from Honduras. The pending grading stocks were seen to decrease by 12,535 bags; to register 34,993 bags pending grading on the day.
The July 2024 to July 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 47.03 Usc/Lb. This equates to 22.76% price discount for the London Robusta coffee.
Today is Pentecost or Whit Monday holiday for many countries and including many of the Western European countries, which may bring about a relatively muted physical coffee trading day.
It was a firmer day on the commodity markets on Friday, as the markets were supported by the announcement from China's finance ministry who plans to start raising 1 trillion Yuan, around US$138 billion in long-awaited, long-term special treasury bonds, to try and stimulate key sectors of its weakening economy. The Coffee, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Cocoa, Corn Sugar and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.271 Sterling, at 1.088 the Euro and with the US Dollar buying 5.103 Brazil Real.
The New York market started the day on Friday trading on a firmer note, while the London market started the day trading on a modest softer note. The London market quickly gained momentum at the outset of the early morning session, in limited volume. The New York market followed suit to likewise gain momentum during the early morning session, albeit also under slim volumes of trade to start the day. Both the New York and London markets were seen to build support as the day progressed. The arrival of the America’s at the start of their business day pushed New York higher, triggering buy stops along the way to accentuate the gains for the day, this assisted to trigger speculative short covering which saw the New York market gain ground quickly throughout the afternoon session, with the London market following suit to make significant gains throughout the afternoon session. The New York market continued the upward momentum before being capped very late in the day, to see the market marginally drop back and settle on a very firm note with most of the gains of the day intact at the close. The London market followed suit to settle on a very firm note at the close, with most of the earlier gains of the day intact.
The London market ended the day on a positive note with 94.23% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, with 94.05 % of the earlier gains of the day intact. This firmer close for the markets, might indicate some degree of support and direction with both the New York and London market gaining momentum throughout the session to settle near to the highs of the day in good volume of trade. One might therefore think that the markets will be set for another hesitant steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JUL 3518 + 98 JUL 206.60 + 8.70
SEP 3453 + 97 SEP 205.45 + 8.50
NOV 3380 + 92 DEC 204.50 + 8.45
JAN 3294 + 89 MAR 203.75 + 8.35
MAR 3212 + 85 MAY 203.35 + 8.30
MAY 3150 + 85 JUL 203.15 + 8.25
JUL 3093 + 85 SEP 202.95 + 8.25
SEP 3028 + 85 DEC 202.75 + 8.30
