Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net long position by 2.31% within the market over the week of trade leading to Tuesday 13th. August 2024: to register a new long position of 38,960 lots, which is the equivalent of 11,044,987 bags. This net long position has most likely been little changed following the period of mixed trade that has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector increase their net long position by 13.51% within the market over the week of trade leading to Tuesday 13th. August 2024: to register a new net long position of 29,622 Lots which is the equivalent of 4,937,000 bags. This net long position has most likely been increased further following the period of mixed but overall firmer trade that has since followed.
The agribusiness analysts, Safras & Mercado have issued their estimate that almost 96% of the new Brazil coffee crop has already been harvested, as of the 12th August 2024. The harvest this year is at a faster pace, when compared to the same time last year which was reported at around 91%. Based on their forecast for a new crop of 66.04 million bags, the report would indicate that so far approximately 63.40 million bags of the new crop coffee have been harvested, the coffee made up of around 20.70 million bags of Conilon robusta coffee, which is reported to be just about completed and approximately 42.70 million bags of arabica coffee harvested, which is reported at 94% complete thus far.
The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of July were 170,320 bags or 26.15% higher than the same month last year, at a total of 821,593 bags. Uganda Robusta exports registered a 22.16% increase when compared to the same month last year, to total 722,444 bags and Arabica exports registered a comparative 17.92% decrease when compared to the same month last year to total 49,149 bags exported in July 2024.
The UCDA also reports that the cumulative exports for the first ten months of the current October 2023 to September 2024 coffee year to be 160,322 bags or 3.32% higher than the same period in the previous year, at a total of 4,983,851 bags. The UCDA have reported that during the month of July, the overall value of coffee exports has been seen to have increased by 98.68% when compared to the same month in the previous year, to total 210.48 million US Dollars. Looking ahead, the coming October 2024 to September 2025 coffee year is expected to come in at a marginally higher production level than the current year, at a total 6.90 million bags. This crop is expected to be made up of 5.89 million bags of Robusta Coffee and 1.05 million bags of arabica Coffee. Of this new crop, the respected U.S. Department of Agriculture Global Agricultural Network, forecast that Uganda will export 6.75 million bags.
The Certified washed arabica coffee stocks held against the New York arabica market were seen to remain unchanged on Friday, to register these stocks at 836,921 bags, with 98.13% of these certified stocks held in, Europe at a total of 821,278 bags and the remaining 1.87% being held in the USA at a total 15,643 Bags. Of this, a total 413,789 bags, or 49.44% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.04% of these certified coffees, from Honduras. The pending grading stocks were seen to increase by 5,145 bags; to register 25,509 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 42.16 Usc/Lb. This equates to 17.27% price discount for the London robusta coffee.
It was a mixed day on the commodity markets on Friday, with the US Dollar softening by 0.20% against a basket of other currencies, a weaker Dollar is traditionally seen to be a bullish factor for commodities traded in other currencies. The Coffee, Cocoa, Sugar, Wheat, Gold and Silver markets ended the day on a firm note, while the Corn, Soybean, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.295 Sterling, at 1.104 the Euro and with the US Dollar buying 5.471 Brazil Real.
The New York and London markets started the day on Friday trading on a firmer note. The London market seen to trade around par for the remainder of the early morning session before attracting a degree of buying support to see market gain momentum, 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 continued to track a firmer path into the late morning session. 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 gains throughout the afternoon session. The New York market continued the upward momentum before being capped late in the day, to see the market marginally drop back and settle on a very firm note at the close. The London market followed suit to settle on a 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 69.16% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 94.53% of the earlier gains of the day intact. This follow through 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 ahead of First Notice Day on the prompt month in New York in two days’ time. One might therefore think that the markets may be pressured for a steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
SEP 4665 + 94 SEP 245.45 + 5.55
NOV 4452 + 74 DEC 244.10 + 6.05
JAN 4278 + 74 MAR 241.60 + 5.90
MAR 4115 + 73 MAY 239.15 + 5.70
MAY 3995 + 66 JUL 236.70 + 5.65
JUL 3887 + 61 SEP 234.35 + 5.55
SEP 3814 + 60 DEC 231.60 + 5.30
NOV 3754 + 60 MAR 229.00 + 5.35
