Coffee Market Report

Safras & Mercado, with the new crop harvest underway have come forth with a revised estimate for the current July 2024 to June 2025 Brazil coffee crop, to revise their initial forecast lower by 6.15% to now total 66.04 million bags. This crop forecast revision made up of 45.30 million bags Arabica coffee, down 3.72% from their previous estimate and 20.70 million bags Conilon robusta coffee, down 11.24% from their previous estimate. Safras report that the revision in crop estimate is due to the usually hot and dry weather experienced during the latter stages of last year and the crop development phase, which has led to a lower-than-average year on year intake of bolder bean screen coffees.

Safras & Mercado have also estimated that almost 74% of the new Brazil coffee crop has already been harvested, as of the 16th July 2024. The harvest this year is at a faster pace, when compared to the same time last year which was reported at around 68%. Based on their forecast for a new crop of 66.04 million bags, the report would indicate that so far approximately 48.87 million bags of the new crop coffee have been harvested, the coffee made up of around 18.80 million bags of Conilon robusta coffee and approximately 30 million bags of arabica coffee harvested thus far. It is expected that weather conditions will remain stable for the remainder of the month, with temperatures in the mid to high teens in degrees Celsius and with no expected cool weather risk ahead of the next full moon which is due on the 21st of July.

In the latest round of independent forecast updates, and following on from a new crop survey, Rabobank has come forth with their revised report to forecast Brazil coffee production to potentially reach 67.10 million bags in the current July 2024 to June 2025 coffee year. This revision is some 3.87% lower than their earlier estimate. The forecast anticipates 44.10 million bags to come from this leading producer of mostly natural arabica coffee, along with an estimated 18.80 million bags Conilon robusta coffee.

The Certified washed arabica coffee stocks held against the New York arabica market were seen to increase by 9,021 bags yesterday, to register these stocks at 818,230 bags, with 98.32% of these certified stocks held in, Europe at a total of 804,512 bags and the remaining 1.68% being held in the USA at a total 13,718 Bags. Of this, a total 412,883 bags, or 50.46% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.37% of these certified coffees, from Honduras. The pending grading stocks were seen to decrease by 1,651 bags on the day; to register 11,573 bags pending grading on the day.

The September 2024 to September 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 37.74 Usc/Lb. This equates to 15.67% price discount for the London robusta coffee.

It was a softer day on the commodity markets yesterday, the leading in influence Oil markets softer on the day, with the latest surveys on Reuters indicating a 98% probability of the first interest rate cut in the cycle to come in September this year out of the USA. The Cocoa and Soybean markets ended the day on a firm note, while the Coffee, Corn, Sugar, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.294 Sterling, at 1.089 the Euro and with the US Dollar buying 5.544 Brazil Real.

The New York market started the day yesterday trading to the south of par on a modest softer note, while the London market started the day trading on a firmer note. The markets quickly attracted some degree of selling pressure to drop back below par and trend in a marginal softer direction for the remainder of the early morning session. The New York and London markets continued in a softer direction albeit in modest volumes for the mid-morning session. As the afternoon progressed, the volume increased marginally to contribute to the day’s direction with speculative selling on 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 degree of speculative long liquidation to accentuate the losses for the day’s trade, seeing both the New York and London markets trade within a comparatively narrow range on the day. The markets continued to be pressured lower for the remainder of the day to settle on the lows for the day at the close.

The London market ended the day on a negative note with 81.98% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 84.91% of the earlier losses of the day intact. This follow through softer close for the markets with both the New York and London markets tracking softer throughout the session to settle near to the lows of the day, will likely see the markets, set 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.

SEP     4479 – 91                                         SEP    240.90 – 2.25
NOV   4317 – 83                                         DEC   239.35 – 2.10
JAN    4139 – 71                                         MAR  237.50 – 2.00
MAR  3995 – 58                                         MAY  234.75 – 1.95
MAY  3896 – 47                                         JUL    232.15 – 2.05
JUL    3805 – 42                                         SEP    229.65 – 2.10
SEP    3725 – 42                                         DEC   227.10 – 2.05
NOV  3668 – 42                                         MAR  224.45 – 1.95