Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund decrease their net long position by 6.21% within this market over the week of trade leading up to Tuesday 6th August 2024; to register a new long position at 51,071 Lots. The longer term in nature, Index Fund sector of this market decrease their net long position by 4.63% within the market, to register a new net long position of 42,458 Lots on the day.
Over the same week, the Non-Commercial Speculative decreased their net long position by 4.06% within the market over the week of trade leading to Tuesday 6th August 2024: to register a new net long position of 39,881 lots, which is the equivalent of 11,306,086 bags. This net long position has most likely been little changed following the period of mixed trade that has since followed.
The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of July were 25.56% higher than the same month last year, to total 3.39 million bags, this number made up of 2.49 million bags of arabica coffee up 13.81% from the same month last year and 900,818 bags of Conilon robusta coffee, up 82.16% from the same month last year. This marks the first month of the new biennially bearing Brazil July 2024 to June 2025 coffee year, for which many independent forecasters have estimated at a median level of around 65.50 million bags.
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first seven months of this calendar year, to be 51.88% higher, overall, when compared to the same time in the previous year, at a remarkable total of 25.83 million bags. This number is made up of 20.65 million bags of arabica coffee up 31.08% from the previous coffee year and 5.18 million bags of Conilon robusta coffee, an increase year on year of 313.70% versus the previous year.
In the latest round of independent forecast updates, Hedgepoint Consultancy has come forth to revise their earlier estimate for the Brazil 2024/25 coffee crop down by 3.65% to now total 63.30 million bags. This crop forecast revision made up of 43.20 million bags Arabica coffee, down 3.35% from their previous estimate and 20.10 million bags Conilon robusta coffee, down 4.29% from their previous estimate. The report refers to the unusually 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.
The analysts Safras & Mercado have reported that Brazil coffee farmers have sold around 40% of the estimated total production of 66.04 million bags from the July 2024 to June 2025 Brazil Coffee crop. This selling activity is seen to be on par with the 41% sold when compared to the same time in 2023, ahead of the 2023/2024 crop year.
Following news of a cold front moving across southeastern Brazil and coffee areas into the new week, reports have come to the fore of zero temperatures, cold winds and in very isolated areas light ground frost reported. This, while disheartening for farmers crops that may have been affected, is reportedly sparse. The colder weather which is seasonally toward the end of the Brazil winter, will not affect the 2024/25 coffee crop which is for the most part already harvested.
The Certified washed arabica coffee stocks held against the New York arabica market were seen to decrease by 7,777 bags yesterday, to register these stocks at 820,732 bags, with 98.09% of these certified stocks held in, Europe at a total of 805,089 bags and the remaining 1.91% being held in the USA at a total 15,643 Bags. Of this, a total 417,361 bags, or 50.85% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.42% of these certified coffees, from Honduras. The pending grading stocks were seen to remain unchanged; to register 49,883 bags pending grading on the day.
The September 2024 to September 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 35.28 Usc/Lb. This equates to 14.64% price discount for the London robusta coffee.
It was a mixed but overall firmer day on the commodity markets yesterday, ahead of key US inflation data due out later this week which may provide further speculative cues on interest rate cuts to come. The Coffee, Gold, Silver, Platinum and Palladium markets ended the day on a firm note, while the Cocoa, Corn, Soybean, Sugar and Wheat markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.277 Sterling, at 1.094 the Euro and with the US Dollar buying 5.493 Brazil Real.
The New York and London markets started the day yesterday trading on very firm notes respectively. The London market quickly gained momentum higher at the outset of the early morning session, in limited volume. The New York market was slower to react before finding a large degree of support to set a higher level, for the remainder of the morning session. Both the New York and London markets were seen to build support as the day progressed, setting ceilings for the day during the mid-morning session. The arrival of the America’s at the start of their business day saw the New York market continue to trade firmer within a large range, 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 was capped during the mid-morning session and the afternoon session saw some degree of selling come to the fore to see the market settle on a firmer note at the close, albeit back from the day’s highs. The London market was seen to settle on a very firm note, with most of the earlier gains of the day intact.
The London market ended the day on a positive note with 67.98% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 44.16% 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, albeit that the markets fell back from the earlier highs of the day, in good volumes of trade. One might therefore think that the markets might be ready for a steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
SEP 4532 + 206 SEP 240.85 + 6.80
NOV 4359 + 197 DEC 238.55 + 8.30
JAN 4209 + 189 MAR 235.40 + 8.60
MAR 4064 + 176 MAY 233.00 + 8.35
MAY 3955 + 163 JUL 230.50 + 8.20
JUL 3853 + 143 SEP 228.15 + 8.25
SEP 3783 + 138 DEC 225.60 + 8.40
NOV 3725 + 138 MAR 223.00 + 8.40
