Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector marginally increase their net long position by 1.26% within the market over the week of trade leading to Tuesday 19th November 2024: to register a new long position of 40,747 lots, which is the equivalent of 11,551,594 bags. This net long position has most likely been increased further following the period of overall firmer 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 30.66% within the market over the week of trade leading to Tuesday 19th November 2024: to register a new net long position of 22,144 Lots which is the equivalent of 3,690,667 bags. This net long position has most likely been increased further following the period of overall firmer trade that has since followed.
The respected U.S. Department of Agriculture Global Agricultural Network USDA have issued their forecast for the production from the predominantly Robusta coffee producing nation of Indonesia for the current April 2024 to March 2025 coffee marketing year, at 10,000,000 bags, or 30.72% higher than the previous coffee marketing year in April 2023 to March 2024. The production figures for the April 2024 to March 2025 coffee year are forecast to be made up of 8,600,000 bags Robusta coffee, up 36.51% from the previous year and 1,400,000 bags Arabica Coffee, up 3.70% from the previous year. Of this new crop, the forecast is that Indonesia will export 21.25% more than the previous marketing year at a total of 5,200,000 bags of green coffee.
The Indonesian domestic coffee consumption has meanwhile, shown steady marginal growth during the April 2023 to March 2024 coffee year whereby it was reported by the USDA to have 0.45% increase year on year, this supported by the development of local roasting and value add industries, absorbing a percentage of local coffee production as well as assisted by permitted imports of other origin coffees. Domestic consumption in Indonesia is made up of a combination of local and imported soluble products as well as local and imported roast and ground coffee products and is forecast by the USDA to be in the region of 4,800,000 bags during the current 2024/2025 coffee marketing year, this 0.21% higher than the same period last year.
According to a report released by the National Coffee Institute of Costa Rica (ICAFE) on Friday, Costa Rica coffee producers have been impacted by Hurricane Rafael and Tropical Storm Sara, earlier this month which brought with them increased rainfall resulting in flooding and landslides whilst the harvest of the 2024/2025 coffee crop continued. ICAFE has estimated that on average around 46 kgs of green coffee equivalent has been lost per hectare due to adverse weather conditions. This whilst noting that the increased rainfall came during the harvest time and an actual view on what the impact has been, will be clearer in the weeks ahead. ICAFE have estimated that the country’s October 2024 to September 2025 coffee year will total 1.31 million bags.
The weather reports from Brazil indicate that the main arabica coffee districts in Southeast Brazil have received good levels of rainfall for the month of November thus far, with weather forecasters expecting the region to receive sporadic rainfall overt the week ahead. The continued conducive weather will be a welcome sign to producers, as the 2025/2026 Brazil coffee crop is in the early development phase.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,787 bags on Friday, to register these stocks at 884,538 bags, with 98.07% of these certified stocks held in Europe at a total of 867,444 bags and the remaining 1.93% being held in the USA at a total 17,094 Bags. Of this, a total 477,306 bags or 53.96% 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 Nicaragua. The pending grading stocks were seen to increase by 3,390 bags on the day, to register 82,325 bags pending grading on the day.
The January 2025 to March 2025 contract arbitrage between the London and New York markets narrowed on Friday, to register this at 75.98 Usc/Lb. This equates to 25.15% price discount for the London robusta coffee.
It was a firmer day on the commodity markets on Friday, with the traditional ‘safe haven’ Gold prices making their biggest gain in two years, despite the firmer US Dollar and expectations for an interest rate cut to come during next month’s US Federal Reserve monetary policy meeting. Coffee, Cocoa, Soybean, Gold, Silver and Platinum markets ended the day on a firm note, the Sugar market remained unchanged on the day, while the Corn, Wheat and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.259 Sterling, at 1.048 the Euro and with the US Dollar buying 5.801 Brazil Real.
The New York market started the day on Friday trading on a modest softer note, while the London market started the day trading on a modest firmer note. The London market dropped back into softer territory early in the day but was quickly seen to reverse the trend to track upward during 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 for the very early morning session before building support into the mid-morning. The volume in both New York and London markets modest and sellers absent at the top, in technical trade. As the day progressed the arrival of the America’s at the start of their business day, brought fresh volume to the arabica market in New York to accentuate the gains. The New York market gained territory quickly, London more gradual to follow suit to make significant gains throughout the afternoon session. The New York market capped at the highs toward the late afternoon session, to marginally drop back and trade in positive territory, to see the New York market settle on a firmer note at the close with most of the earlier gains of the day intact. The London market was also seen to trade near to the highs of the day, 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 85.71% of the earlier gains of the day intact, while the New York market ended the day on a likewise very positive note, with 78.05% 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 track upwards before being capped late in the day, albeit in fair volumes of trade. One might therefore think that the markets will be set for a follow through buoyant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 4985 + 198 MAR 302.10 + 6.40
MAR 4923 + 191 MAY 299.60 + 6.45
MAY 4859 + 181 JUL 293.90 + 5.35
JUL 4789 + 173 SEP 288.30 + 4.65
SEP 4731 + 175 DEC 280.85 + 4.10
NOV 4681 + 171 MAR 274.20 + 3.80
JAN 4624 + 170 MAY 266.90 + 3.20
MAR 4575 + 170 JUL 259.35 + 2.60
