Coffee Market Report
| Brazil’s government food supply and statistics agency CONAB have come forth to report that Brazilian Coffee producers are, due to larger biennial bearing factors for the arabica coffee farms, forecast to produce 58.81 million bags arabica for the July 2024 to June 2025 crop year. This estimate has been marginally revised upwards by 1.26% from their previous estimate of 58.08 million bags released in January this year. This revised crop estimate figure is 6.80% larger than the current 2023/2024 crop year.
CONAB has projected that the 2024 arabica coffee production will be 8.20% larger than the previous year at a total of 42.10 million bags, while Robusta production is forecast to be 3.30% larger than the previous year at a total of 16.71 million bags. The CONAB forecasts are traditionally conservative, and many would therefore anticipate this as an indication that the new 2024 Brazil coffee crop might reach closer to 68.50 million bags, in line with the forecasts that are coming to the fore from a number of independent stakeholders. This, as the Brazil conillon robusta crop is currently in harvest and the new Brazil arabica coffee crop has begun harvest in some areas. The report also assesses that the land under coffee in Brazil shall remain steady at 2.25 million hectares, with an estimated yield of 30.90 Bags per hectare during the 2024/2025 coffee year, this number up 5.20% from the previous year. Meanwhile the year has started with somewhat seasonally normal weather for many of the main coffee districts in Brazil. The winter months are setting in within the southern hemisphere, typically sees the focus of the coffee markets shift to the largest coffee producer and exporter, Brazil, where the arrival of cooler weather to the vast coffee growing areas in Brazil gains heightened focus. Weather forecasts will be monitored by both the speculative sector and coffee industry participants, as winter months progress through August, to potentially add further volatility to the coffee futures markets, in the short to medium term. Safras & Mercado have estimated that almost 15% of the new Brazil coffee crop has already been harvested as of the 21st May 2024. The harvest this year is at a marginally faster pace, when compared to the same time last year which was reported at 12%. Based on the forecast for a new crop of 69.50 million bags, the report would indicate that so far approximately 10.45 million bags of the new crop have been harvested. The coffee made up of around 5.30 million bags of conillon robusta coffee, and approximately 5.15 million bags of arabica coffee harvested thus far. In the public domain are reports of the early harvest recording a lower-than-average year on year intake of bolder bean screen coffees from this early harvest. The USA will observe their Memorial Day holiday on Monday 27th May, and the New York Arabica market will be closed accordingly, whilst the UK will celebrate their Spring Bank Holiday on the same day which shall see the London Robusta Market closed for the day. The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 9,353 bags yesterday, to register these stocks at 774,716 bags, with 99.28% of these certified stocks being held in, Europe at a total of 769,127 bags and the remaining 0.72% being held in the USA at a total 5,589 Bags. Of this, a total 384,240 bags, or 49.60% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 17.06% of these certified coffees, originating from Honduras. The pending grading stocks were seen to decrease by 8,913 bags; to register 22,200 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 42.42 Usc/Lb. This equates to 19.67% price discount for the London Robusta coffee. It was a softer day overall on the commodity markets yesterday, with the US Dollar gaining ground against a basket of other currencies, a firmer Dollar is traditionally seen to be a bearish factor for commodities traded in other currencies. The Cocoa, Corn, Sugar and Wheat markets ended the day on a positive note, while the Coffee, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.269 Sterling, at 1.081 the Euro and with the US Dollar buying 5.144 Brazil Real. The New York and London markets started the day yesterday trading to the north of par on firmer notes, carrying through the momentum from the close on Wednesday. The markets quickly attracted some degree of selling pressure to drop back below par and trend in a softer direction for the remainder of the early morning session, continuing a softer trajectory, to set new lows for the day. As the afternoon progressed, both the New York and London markets recovered from the earlier lows to attract a degree of buying support into the mid-Afternoon session. This saw the markets recover some of the earlier losses of the day and trend back towards par. As the day progressed, the volume increased to contribute to the day’s direction with speculative selling returning to the New York floor assisting to trigger stops along the way. The London market followed suit and the markets continued to project lower with a large degree of speculative long liquidation to accentuate the losses for the day’s trade. The markets found support once more, near to the lows of the day to recover some of the earlier losses and settle on softer notes at the close. The London market ended the day on a negative note with 55.68% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 57.14% of the earlier losses of the day intact. This softer close for the markets does little to indicate direction, albeit that the New York and London markets recovered some of the earlier losses of the day, one might think that the markets are due for little better than a hesitant start to early trade today, ahead of the Memorial Day and Spring Bank holidays in the New York and London markets respectively, on Monday, against the prices set yesterday against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK USC/LB. JUL 3819 – 98 JUL 215.65 – 4.80 |
