Coffee Market Report
The respected U.S. Department of Agriculture Global Agricultural Network (USDA) have come forth to revise their early forecast for the October 2023 to September 2024 coffee crop from Colombia, higher by 6.09%, to now total 12.20 million bags. The report further anticipates green coffee exports from this fine washed arabica producing country to reach 10.60 million bags during the October 2023 to September 2024 coffee year, this figure 10.42% higher than the previous 2022/2023 coffee year. The higher production performance from this leading quality washed arabica producer, reflecting as weather conditions improved in the first half of the year due to the end of La Niña weather phenomenon.
The same report has forecast the new crop to come from Colombia for the forthcoming October 2024 to September 2025 coffee year, at an anticipated marginal 1.64% increase on that of the previous coffee production year, at a total of 12.40 million bags. It is anticipated that Colombia will export marginally more than the current coffee year, during the 2024/2025 coffee year, at a total of 10.80 million bags.
While the forecast for the upcoming year is more positive related to improved weather in Colombia, this is still some way away from this country 's ten-year average performance in production of quality washed arabica coffee. Over an average of ten years, production is pegged at 13.20 million bags per annum and, thus one might observe that the forecast for 2024/2025 coffee year to come is 5.97% below attainable average, and 8.05% below the peak of 14.60 million bags attained in the 2016/2017 coffee year, with exports during this year, reported at a total of 13.50 million bags to consumer markets.
The United States Department of Agriculture Global Agricultural Network USDA have reported their forecast for the arabica coffee crop from Nicaragua for the current October 2023 to September 2024 coffee year, to reach an overall 2.41 million bags, or 9.39% lower than the previous coffee production year in October 2022 to September 2023 production that is reported at 2.66 million bags.
The same report has forecast the new crop to come from Nicaragua for the forthcoming October 2024 to September 2025 coffee year, at an anticipated 8.30% increase on that of the previous coffee production year, at a total of 2.61 million bags. This new arabica coffee crop from Nicaragua is due to start harvest toward the end of the year and is forecast is that Nicaragua will export 2.46 million bags, or 9.33% more than the current 2023/2024 coffee year.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to decrease by 2,025 bags yesterday, to register these stocks at 765,363 bags, with 99.27% of these certified stocks being held in, Europe at a total of 759,774 bags and the remaining 0.73% being held in the USA at a total 5,589 Bags. Of this, a total 374,337 bags, or 48.91% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.34% of these certified coffees, originating from Honduras. The pending grading stocks were seen to remain unchanged; to register 28,443 bags pending grading on the day.
The Certified Robusta coffee stocks held against the London Exchange were seen to increase by 63,333 bags during the week up to the 20th May 2024, to register a total of 741,000 bags, with Brazil Conillon accounting for over 90% of coffee held against the London Exchange.
The July 2024 to July 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 47.83 Usc/Lb. This equates to 22.02% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets yesterday, ahead of the minutes from the US Federal Reserve’s latest Policy meeting due out later today. The Coffee, Cocoa, Wheat, Silver and Palladium markets ended the day on a positive note, while the Corn, Soybean, Sugar, Gold and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.271 Sterling, at 1.085 the Euro and with the US Dollar buying 5.123 Brazil Real.
The New York and London markets started the day yesterday trading on a firmer note, and New York carrying through momentum from the close on Monday. The London market quickly gained momentum gapping higher at the outset of the early morning session, in limited volume. The New York market was slower to react and having set a higher level, traded either side of par in a comparatively quiet volume morning. 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 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 95.53% of the earlier gains of the day intact, while the New York market ended the day on a likewise very positive note, with 84.67% of the earlier gains of the day intact. This follow through 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 under good volumes of trade. One might therefore think that the markets might be pressured for a steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JUL 3734 + 235 JUL 217.20 + 10.50
SEP 3673 + 237 SEP 216.00 + 10.25
NOV 3590 + 229 DEC 214.70 + 9.95
JAN 3495 + 224 MAR 213.70 + 9.65
MAR 3405 + 216 MAY 213.00 + 9.40
MAY 3341 + 214 JUL 212.45 + 9.15
JUL 3284 + 214 SEP 211.90 + 9.05
SEP 3219 + 214 DEC 211.45 + 9.00
