Coffee Market Report
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the coming 2024/2025 coffee year is expected to increase by 15.04% from the current year to total around 13 million bags. This cited to be due to newer climate resilient varieties that have been planted over time. This follows two consecutive years of La Nina affected crop years, where heavy rainfall impacted crop production. The report also states that an additional 100,000 hectares of coffee will be replaced with new varieties this year, bringing the total area under coffee in Colombia to 842,000 hectares. With a focus on increasing productivity levels to reach 17 bags per hectare, as the current higher reference prices have assisted to boost returns to farmers at a local level allowing for the use of inputs such as fertiliser. The National Coffee Growers Federation have reported that the country’s cumulative coffee exports for first eleven months of the current October 2023 to September 2024 coffee year are 922,000 bags or 9.35% higher than the same period in the previous coffee year, at a total of 10,819,000 bags.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,034 bags yesterday, to register these stocks at 831,727 bags, with 97.91% of these certified stocks held in Europe at a total of 814,313 bags and the remaining 2.09% being held in the USA at a total 17,414 Bags. Of this, a total 402,559 bags, or 48.40% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.40% of these certified coffees, from Honduras. The pending grading stocks were seen to remain unchanged; to register 10,881 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 26.85 Usc/Lb. This equates to 10.03% price discount for the London robusta coffee.
It was a firmer day overall for the commodity markets yesterday, with the leading in influence Oil markets firmer on the day, ahead of key inflation data from the USA due to be released later this week, which could provide speculative guidance on further interest rate cuts to come. The Coffee, Cocoa, Sugar, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a firm note, while the Corn and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.341 Sterling, at 1.119 the Euro and with the US Dollar buying 5.449 Brazil Real.
The New York and London markets started the day yesterday in muted volume, trading on firm notes. The London market quickly gained momentum gapping higher at the outset of the early morning session. The New York market was also seen to make gains during the early morning session, in comparatively lighter volumes to start the day. Both the New York and London markets were seen to build support as the day progressed, before encountering some degree of resistance during the mid-morning session to drop back from the morning highs. 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 drop back and settle on a very firm note at the close, in fair volumes on the day. The London market set a new high late in the afternoon session before encountering resistance near to the highs of the day to drop back and settle on a firmer note at the close.
The London market ended the day on a positive note with 37.50% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 61.48% of the earlier gains of the day intact. The firmer close for the markets might indicate some degree of confidence and direction, albeit that the markets encountered resistance near to the highs of the day late in the day, which may see the markets pressured for a hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 5312 + 36 DEC 267.80 + 4.15
JAN 5035 + 32 MAR 265.85 + 4.55
MAR 4846 + 30 MAY 263.35 + 4.55
MAY 4709 + 27 JUL 260.25 + 4.40
JUL 4594 + 25 SEP 256.60 + 4.20
SEP 4514 + 22 DEC 251.40 + 3.90
NOV 4436 + 22 MAR 246.45 + 3.80
JAN 4346 + 22 MAY 241.90 + 3.75
