Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund increase their net long position by 5.76% within this market over the week of trade leading up to Tuesday 19th November 2024; to register a new long position at 60,510 Lots. The longer term in nature, Index Fund sector of this market increase their net long position by 1.85% within the market, to register a new net long position of 52,792 Lots on the day.
Over the same week, the Non-Commercial Speculative 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 net 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.
Vietnam, the world’s top robusta producer, is currently harvesting the new October 2024 to September 2025 mainly Robusta coffee crop, with limited carryover inventory held in country from the previous 2023/24 export year. The current coffee year that is predominantly robusta production and Vietnam, the leading robusta producer and exporter to consumer markets, is forecast to have potential to reach an estimated 28 million bags, of which 95% is robusta coffee. While there has been an observed improvement in farming husbandry, that would indicate improved yields to come, it is possible that excessively warm climatic conditions reported in the earlier stages of this 2024/25 cherry development phase, could see some of the higher early estimates by independent crop forecasters reviewed, as the harvest progresses.
Indonesia’s current April 2024 to March 2025 crop, which is predominantly robusta (85%), is forecast to yield 10 million bags, marking a 30.72% increase compared to the previous year. Domestic consumption is expected to absorb 4.80 million bags, while the remainder will be directed to export markets. Indonesia permits coffee imports to support its growing soluble coffee production and value-added roasting industries, reflecting the dynamic nature of its coffee sector.
Uganda, Africa's leading robusta producer and the fourth-largest exporter to non-producing consumer markets, is projected to maintain its coffee production levels in the current October 2024 to September 2025 coffee year. Estimates suggest a total output of a potential 6.50 million bags, matching the current year’s production. This comprises approximately 5.50 million bags of robusta and 1 million bags of arabica coffee.
Within Brazil meanwhile, early estimates are coming to the fore for the July 2025 to June 2026 coffee year indicates a recovery and growth in potential and production for the Conilon robusta areas, to potentially reach a record 25.60 million bags. The foreseeable increase in Conilon robusta availability that may be expected to start to flow to the markets toward mid-2025, is required to sufficiently fuel local demand as well as maintain the etched-out export market share attained through the worldwide tighter supply conditions that has developed in the robusta production and supply segment through the past three years.
When one considers the new crop to come from Vietnam, which is currently being harvested and is thought to be largely uncommitted for the time of year, the export flow from this largest robusta producer, together with India, Ivory Coast, Uganda, are likely to support first half 2025 robusta coffee shipments to consumer markets, with mid-year Brazil, Indonesia, Brazil Conilon and Uganda robusta harvests to start to flow to the market in time to support consumer market demand in the latter half of 2025. Unforeseen weather developments aside, there may be some degree of robusta supply relief ahead, for price pressured consumer markets, as well as for developing consumption in producer countries.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 760 bags yesterday, to register these stocks at 885,298 bags, with 98.07% of these certified stocks held in Europe at a total of 868,204 bags and the remaining 1.93% being held in the USA at a total 17,094 Bags. Of this, a total 478,220 bags or 54.02% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.03% of these certified coffees, from Nicaragua. The pending grading stocks were seen to decrease by 6,419 bags on the day, to register 75,906 bags pending grading on the day.
The January 2025 to March 2025 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 73.01 Usc/Lb. This equates to 23.95% price discount for the London robusta coffee.
It was a softer day on the commodity markets yesterday, with the US Dollar index firmer on the day, traditionally a bearish factor for commodities traded in other currencies. Coffee and Soybean markets ended the day on a firm note, while the Cocoa, Corn, Sugar, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.255 Sterling, at 1.048 the Euro and with the US Dollar buying 5.798 Brazil Real.
The New York market started the day trading on a firmer note, whilst the London market started the day yesterday trading to the south of par. The markets gained ground during the early morning session tracking higher for the remainder of the late morning session, albeit in light volume. As the afternoon progressed, the markets continued to build momentum, trending in a firmer direction with trade volume beginning to pick up, albeit still comparatively light. The markets hit a ceiling to limit the gains for the day during the mid-afternoon session, with sellers returning to the floor. The New York and London markets drop back from the earlier highs. The London market dropped back from the highs of the day to settle on a firmer note with only some of the earlier gains of the day intact, whilst the New York market dropped back from the earlier highs to settle on a modest firmer note at the close.
The London market ended the day on a positive note with 36.55% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, with 29.51% of the earlier gains of the day intact. This follow through firmer close for the markets, to maintain only some of the earlier gains of the day, with the US Dollar trending firm on the day, might see the markets due for a mildly softer opening in early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 5110 + 125 MAR 304.80 + 2.70
MAR 5036 + 113 MAY 302.25 + 2.65
MAY 4963 + 104 JUL 296.30 + 2.40
JUL 4875 + 86 SEP 290.35 + 2.05
SEP 4800 + 69 DEC 282.60 + 1.75
NOV 4738 + 57 MAR 275.70 + 1.50
JAN 4671 + 47 MAY 267.70 + 0.80
MAR 4606 + 31 JUL 259.25 – 0.10
