Coffee Market Report

The certified washed arabica coffee stocks held against the New York Exchange continue to register gradual average increases, climbing to levels last seen in February 2023, up from more than a twenty-year low recorded in December last year, that registered at 224,066 bags, to register a still comparatively low 825,633 bags yesterday. This marks an increase of 311,328 bags or 60.53% from the same time last year when the certified washed arabica coffee stocks registered 514,305 bags on 14th August 2023. These certified warehouse coffee stocks are stored in the certified warehouses of the exchange in Europe and to a lesser extent, warehouses in the USA. The largest contribution toward the increase in certified stocks, Brazil semi-washed arabica coffee, supported by shipments from largest Central American washed arabica country Honduras. The prevailing New York arabica market conditions are conducive to lead one to anticipate that there may be some replenishment of Brazil semi-washed arabica as the Brazil 2024/25 crop flows to the markets, albeit through difficult logistical conditions. The European warehouses of the exchange, however, must contend with the implications and requirements of the EUDR regulation, which is set to come into effect at the end of this year.

The Certified washed arabica coffee stocks held against the New York arabica market were seen to increase by 3,137 bags yesterday, to register these stocks at 825,633 bags, with 98.09% of these certified stocks held in, Europe at a total of 809,900 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 49.73% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.10% of these certified coffees, from Honduras. The pending grading stocks were seen to decrease by 726 bags; to register 35,666 bags pending grading on the day.

The Certified robusta coffee stocks held against the London Exchange were seen to decrease by 21,833 bags during the week up to the 12th August 2024, to register a total of 1,025,166 bags, with Brazil Conilon accounting for over 90% of coffee held against the London Exchange.

The September 2024 to September 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 34.15 Usc/Lb. This equates to 14.41% price discount for the London robusta coffee.

It was a mixed but overall softer day on the commodity markets yesterday, as newly released US Consumer Price Data showed that consumer prices increased by 0.20% during July, which tamped down expectations of a large interest rate cut in September. The Coffee, Corn, Soybean and Wheat markets ended the day on a firm note, while the Cocoa, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.284 Sterling, at 1.101 the Euro and with the US Dollar buying 5.470 Brazil Real.

The New York and London markets started the day yesterday in muted volume, trading on a firmer note. 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 drop back and settle on a firm note at the close, ahead of first notice day in the prompt month next week Wednesday. The London market was seen to also 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 84.34% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 68.80% 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 to settle near to the highs of the day albeit in modest 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.

SEP     4472 + 97                                          SEP     237.00 + 4.30
NOV   4292 + 105                                        DEC    234.65 + 5.60
JAN    4131 + 106                                        MAR   232.15 + 5.85
MAR  3883 + 101                                        MAY   230.00 + 5.80
MAY  3873 + 96                                          JUL      227.65 + 5.70
JUL    3773 + 93                                          SEP      225.50 + 5.70
SEP    3702 + 90                                          DEC     223.20 + 5.70
NOV  3642 + 88                                          MAR    220.80 + 5.70