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 marginally decrease their net long position by 0.64% within this market over the week of trade leading up to Tuesday 10th December 2024; to register a new long position at 57,332 Lots. The longer term in nature, Index Fund sector of this market increased their net long position by 1.04% within the market, to register a new net long position of 50,574 Lots on the day.
Over the same week, the Non-Commercial Speculative marginally increased their net long position by 0.52% within the market over the week of trade leading to Tuesday 10th December 2024: to register a new net long position of 39,247 lots, which is the equivalent of 11,126,351 bags. This net long position has most likely been trimmed following the period of sideways but overall softer trade that has since followed.
The harvest of the October 2024 to September 2025 Vietnam new crop is underway and estimated to be at a slower pace than the same time last year. The harvest has seen some delays due to a continuation of wet weather into the later part of November and early December. Weather forecasters are expecting an improvement in conditions for the week ahead, which will be conducive for harvesting activities to pick up pace. In terms of volume of coffee that is due from this crop, most of the forecasts vary widely ahead of harvest, between 26 and 30 million bags. One may anticipate further reviewed forecasts to come to the market as the harvest progresses into the New Year.
On the political front, the anticipated altered political landscape to come in 2025, for largest consumer nation USA, has created some degree of uncertainty in international markets. The implication of altered policies and for trade relations with several producer countries, to include Central and South America, largely revolves around agricultural products and textiles. While it is difficult to foresee that the flow of coffee may be directly affected, these economies are to a varying extent, more reliant upon conducive trade terms with the USA, than vica versa.
The Brazil Real has meanwhile lost 3.41% of this currency’s value against the US Dollar since the beginning of December, which might encourage some degree of selling within the internal market. The weaker Brazil Real bringing in increased returns to producers, following US Dollar based sales.
The Certified washed Arabica coffee stocks held against the New York exchange decrease by 75 bags yesterday, to register these stocks at 940,351 bags, with 98.18% of these certified stocks held in Europe, at a total of 923,257 bags and the remaining 1.82% being held in the USA at a total 17,094 Bags. Of this, a total 571,408 bags or 60.77% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 10.52% of these certified coffees, from Peru. The pending grading stocks were seen to decrease by 2,666 bags on the day, to register 91,829 bags pending grading on the day.
The January 2025 to March 2025 contract arbitrage between the London and New York markets widened yesterday, to register this at 90.20 Usc/Lb. This equates to 27.55% price discount for the London robusta coffee.
It was a mixed day overall on the commodity markets yesterday, with the US Federal Reserve expected to cut interest rates by 25 basis points during its two-day policy meeting due to start today, which would follow the announcement from the European Central Bank who cut interest rates by 25 basis points, along with providing an outlook into 2025 and beyond. The Coffee, Cocoa, Corn, Wheat and Platinum markets ended the day on a firm note, the Silver market remained unchanged on the day, while the Soybean, Sugar, Gold and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.268 Sterling, at 1.051 the Euro and with the US Dollar buying 6.148 Brazil Real.
The New York and London markets started the day yesterday trading to the south of par on softer notes respectively, pressured lower early in the day to see the markets set a new low for the day’s session, albeit in light volumes to start the day. As the afternoon progressed, the New York and London markets rebounded from the lows of the day as speculative buying support returned to the floor. The New York and London markets continued to gain momentum to rally late in the day around the opening of business day in the Americas’, modest volumes of trade, both markets continued to move in a firmer direction accentuating the gains for the day. The upward momentum brought sellers back to the floor at the top of the day, and the New York market hit a ceiling late in the afternoon to limit the sessions gains. The New York market settled on a firmer note at the close, while the London market dropped back from the highs, pressured lower by selling in the market to settle on a modest firmer note at the close.
The London market ended the day on a positive note with 26.58% of the earlier gains of the day intact, while the New York market ended the day a likewise positive note, with 69.60% of the earlier gains of the day intact. This firmer close for the markets, albeit that both the New York and London market fell back from the highs of the day to see the New York market maintain more than half of the earlier gains of the day and the London market settling on a modest firmer note with only some of the earlier gains of the day intact, ahead of first notice day in the prompt month in the London market due on the 24th December, to possibly see the market set for a steady follow through start to early trade today, against the prices set yesterday, as follows
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 5230 + 21 MAR 327.40 + 7.90
MAR 5203 + 19 MAY 324.65 + 7.60
MAY 5140 + 14 JUL 319.60 + 7.15
JUL 5057 + 11 SEP 310.95 + 6.10
SEP 4956 + 1 DEC 295.60 + 4.90
NOV 4879 – 2 MAR 284.30 + 4.20
JAN 4799 – 4 MAY 274.35 + 4.05
MAR 4729 – 4 JUL 264.25 + 3.85
