Coffee Market Report

The European Union’s EUDR parliamentary vote on the potential delays to the implementation of the European Union's Deforestation Regulation (EUDR), is due to see discussions kick off today with a decision reported to be voted on by the end of tomorrow. The coffee industry along with the cocoa, cattle, timber, oil palm, soya and rubber industries at large will be keeping a keen eye on proceedings in the days ahead.

Friday is the Proclamação da República (Republic Day) holiday in Brazil. This will likely see most internal market players out of the field of play for the day.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 285 bags yesterday, to register these stocks at 852,161 bags, with 97.89% of these certified stocks held in Europe at a total of 834,107 bags and the remaining 2.11% being held in the USA at a total 18,054 Bags. Of this, a total 434,878 bags or 51.03% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.70% of these certified coffees, from Nicaragua. The pending grading stocks were seen to decrease by 5,525 bags on the day, to register 106,757 bags pending grading on the day.

The December 2024 to January 2025 contract arbitrage between the New York and London markets widened yesterday, to register this at 57.75 Usc/Lb. This equates to 21.91% price discount for the London robusta coffee.

It was a softer day overall on the commodity markets yesterday, and the US Dollar continuing to gain momentum reaching a four-month high against a basket of other currencies. The Coffee, Cocoa and Silver markets ended the day on a firm note, the Sugar market remained unchanged on the day, while the Corn, Soybean, Wheat, Gold, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.276 Sterling, at 1.063 the Euro and with the US Dollar buying 5.749 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 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 44.85% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 72.05% of the earlier gains of the day intact. This upward momentum for the day, that tracked lower as the trading day concluded, registered a close for the markets that may see the markets due for a steady start to trade today, ahead of first notice day on the prompt month in the New York market due in less than five trading days' time registering open interest at 37,608 Lots, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                 NEW YORK USC/LB.

JAN        4537 + 61                                     DEC       263.55 + 7.35
MAR      4461 + 49                                     MAR      263.10 + 7.25
MAY      4394 + 36                                     MAY      261.45 + 6.95
JUL        4317 + 28                                     JUL        258.40 + 6.50
SEP        4241 + 24                                     SEP        254.60 + 6.05
NOV      4179 + 19                                     DEC       248.45 + 5.50
JAN       4111 + 16                                     MAR      243.15 + 5.30
MAR     4051 + 15                                     MAY      238.55 + 5.10