Coffee Market Report
The Coffee Board of India have reported their production estimate for the present October 2023 to September 2024 coffee crop to reach similar levels to the previous year at a total of 6.00 million bags. This figure in line with earlier reports from independent forecasters. The Coffee Board have signalled that there may be a drop in production for the coming October 2024 to September 2025 coffee year due to unfavourable weather conditions experienced in the Karnataka and Kerala regions. High temperatures during the earlier months of April and May, may have affected the flowering and cherry set of the trees during the early stages of development. These warmer than usual temperatures were followed by heavy rainfall during July and throughout the first half of August, which is traditionally seen as the monsoon season over the main coffee districts runs from June through to September.
The respected United States Department of Agriculture USDA Global Agricultural Information Network have reported that the October 2024 to September 2025 Indian coffee crop shall be marginally smaller than the previous year at a total of 5,970,000 bags. The report further anticipates green coffee exports from this primarily Robusta producing country to reach 4,200,000 bags in the October 2024 to September 2025 coffee year. 1.18% lower than the previous year.
The Certified washed arabica coffee stocks held against the New York arabica market were seen to increase by 1,764 bags yesterday, to register these stocks at 822,496 bags, with 98.09% of these certified stocks held in, Europe at a total of 806,853 bags and the remaining 1.91% being held in the USA at a total 15,643 Bags. Of this, a total 410,641 bags, or 49.93% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.14% of these certified coffees, from Honduras. The pending grading stocks were seen to decrease by 13,491 bags; to register 36,392 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 34.25 Usc/Lb. This equates to 14.72% price discount for the London robusta coffee.
It was a mixed but overall softer day on the commodity markets yesterday, with the US Dollar losing ground against a basket of other currencies on the day, offset by newly released US producer price data that increased less than what was expected indicated that inflation continues to slow to levels that the US Federal Reserve expect to see before the first interest rate cuts are actioned. The Cocoa, Sugar, Platinum and Palladium markets ended the day on a firm note, while the Coffee, Corn, Soybean, Wheat, Gold and Silver markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.286 Sterling, at 1.099 the Euro and with the US Dollar buying 5.457 Brazil Real.
The New York and London markets started the day yesterday pressured lower during the early session, dropping below par to trend in a softer direction from the open. The markets continued a softer trajectory as resistance was encountered to see the markets move lower during the remainder of the morning session. As the afternoon progressed the volume increased to contribute to the day’s direction with speculative selling on the New York floor assisting to trigger stops along the way, with open interest on the prompt month reported at 34,111 lots. 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 selling activity started to wane toward the end of the days’ trade, to see the markets marginally recover some of the earlier losses of the day, in good volumes of trade for both the New York and London markets, to settle near to the lows of the day, on a very soft notes at the close.
The London market ended the day on a negative note with 83.95% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 75.81% of the earlier losses of the day intact. This very soft close, with both the New York and London markets settling near to the lows of the day with most of the earlier losses intact, ahead of first notice day for the prompt month in New York in less than 5 trading days’ time, might lead one to think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
SEP 4375 – 157 SEP 232.70 – 8.15
NOV 4187 – 172 DEC 229.05 – 9.50
JAN 4025 – 183 MAR 226.30 – 9.10
MAR 3882 – 182 MAY 224.20 – 8.80
MAY 3777 – 178 JUL 221.95 – 8.55
JUL 3680 – 173 SEP 219.80 – 8.35
SEP 3612 – 171 DEC 217.50 – 8.10
NOV 3554 – 171 MAR 215.10 – 7.90
