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 2.21% within the market over the week of trade leading to Tuesday 1st October 2024: to register a new long position of 40,724 lots, which is the equivalent of 11,545,073 bags. This net long position has most likely been decreased further following the period of overall softer 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 6.65% within the market over the week of trade leading to Tuesday 1st October 2024: to register a new net long position of 34,194 Lots which is the equivalent of 5,699,500 bags. This net long position has most likely been decreased following the period of mixed but overall softer trade that has since followed.
The Brazil government have reported preliminary data to illustrate that the country’s green coffee exports for the month of September were 36.79% higher than the same month last year, at a total of 4,050,950 bags. The official breakdown of coffee exports by description for September can be anticipated to report the breakdown of this export data to arabica, robusta and soluble green coffee equivalent, and one might expect to see Brazil Conilon again posting high year on year export increases, in line with heightened demand worldwide for fill in robusta coffee, despite the continued export port bottlenecks.
On the weather front meanwhile, rainfall across the vast Brazil coffee growing regions is expected to increase towards the end of this week with forecasts for intensified wet weather, which will be a welcome sign to coffee producers following a drier than historically normal month of September. These rains, should they come to fruition, could mark the beginning of the rain season which will be needed to support flowering that is due to set the next Brazil 2025/26 crop to come.
The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of September have registered 3.05% higher from the same month last year, at 866,667 bags. The cumulative export performance for the full October 2023 to September 2024 coffee year in Vietnam the largest producer and exporter of robusta coffee to consumer markets, is reported to be 3,397,533 bags or 12.26% lower than the same period in the previous year, to cumulative twelve-month total at 24,307,866 bags. This lower year of export statistics serve to underscore the already absorbed reality of the lower production and reduced availability out of this leading robusta producer in the 2023/24 seasonal year, a factor that is firmly reflected in the historic record high values set in the London futures market.
The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first nine months of the calendar year, is reported at 37.80% higher than the same period in the previous year, at a total of approximately 4.30 billion US Dollars.
The weather reports from Vietnam forecast a continuation of rain due to fall over the Central Highlands in the week to come. This as the world’s largest Robusta coffee producer has will begin the new October 2024 to September 2025 coffee crop harvest. Traditionally one would look to the cessation of the rains around this time to assist producers to begin their harvest. The end to the rain season will be monitored into November, as a prolonged continuation of rainfall could potentially delay the start of the robusta harvest.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 8,702 bags on Friday, to register these stocks at 804,576 bags, with 97.84% of these certified stocks held in Europe at a total of 787,162 and the remaining 2.16% being held in the USA at a total 17,414 Bags. Of this, a total 370,535 bags, or 46.05% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.91% of these certified coffees, from Honduras. The pending grading stocks were seen to decrease by 4,324 bags, to register 54,066 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets narrowed on Friday, to register this at 27.51 Usc/Lb. This equates to 10.69% price discount for the London robusta coffee.
It was a softer day on the commodity markets on Friday, with the US Dollar gaining ground against a basket of other currencies, a firmer Dollar is traditionally seen to be a bearish factor for commodities traded in other currencies. The leading in influence Oil markets volatile in view of the geopolitical escalation in the Middle East. It was a firmer day for Coffee, Cocoa and Silver markets which ended the day on a firm note, the Palladium market remained steady on the day, while the Corn, Soybean, Sugar, Wheat, Gold and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.312 Sterling, at 1.097 the Euro and with the US Dollar buying 5.455 Brazil Real.
The New York and London markets started the day on Friday trading to the south of par on a modest softer note respectively. Both markets continued to oscillate to either side of par, before attracting a modest degree of selling pressure to trade below par. The markets reversed this trend during the mid-morning session, 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 gains throughout the afternoon session. The London market continued the upward momentum before being capped very late in the day, to see the market marginally drop back and settle on a very firm note at the close. The New York market followed suit to 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 83.91% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 92.98% 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 may be set for another steady start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 5067 + 146 DEC 257.35 + 5.30
JAN 4859 + 139 MAR 255.65 + 5.15
MAR 4674 + 126 MAY 253.55 + 5.00
MAY 4533 + 110 JUL 251.00 + 4.95
JUL 4407 + 95 SEP 248.05 + 4.90
SEP 4324 + 94 DEC 243.20 + 4.80
NOV 4250 + 95 MAR 238.70 + 4.80
JAN 4170 + 96 MAY 234.55 + 4.80
