Coffee Market Report
The U.S. Department of Agriculture (USDA) Foreign Agricultural Services have forecast global coffee production for the current October 2024 to September 2025 coffee year to reach 174.86 million bags, a figure reported at 4.08% higher than the previous year. This, due primarily through regional attaché estimates for an improvement in production potential to come for Colombia, Indonesia and Vietnam. In this respect, the USDA have forecast an estimated production output in Colombia for the October 2024 to September 2025 coffee year to be 300,000 bags or 2.36% larger than the previous coffee year, at a total of 12.90 million bags.
The USDA have forecast production output for the mainly robusta producing nation of Indonesia for the April 2024 to March 2025 coffee year already mostly absorbed to be an improved 2.75 million bags at a total of 10.90 million bags. Significantly, the USDA forecast for production to come from Vietnam in the October 2024 to September 2025 coffee year, is considered to be on the higher end of estimates for this largest robusta producing country, at 30.10 million bags, with most independent forecasters estimating the new 2024/25 crop at a median total of 27.35 million bags.
The USDA report has forecast an estimated production output in Brazil for the July 2024 to June 2025 coffee year to be 100,000 bags or 0.15% larger than the previous coffee year, at a total of 66.40 million bags. This figure made up of 45.40 million bags Arabica coffee, up 1.11% from the previous year and 21 million bags Robusta coffee, down 1.86% from the previous year. The USDA have revised their figures for ending stocks in Brazil at the end of the June 2024 to July 2025 Coffee year lower by 2.30 million bags since their last estimate in June this year to now be recorded at 1.24 million bags, heading into the new July 2025 to June 2026 biennially bearing Brazil coffee crop year, for which the USDA have yet to release a forecast.
The USDA have forecast that global coffee demand for the current October 2024 to September 2025 coffee year will possibly reach a 168.07 million bags, up 3.10% from the previous year. Their latest forecast would indicate the potential for a global surplus coffee supply of 6.79 million bags. One might comment that this estimate by the USDA is somewhat of an outlier when compared to other independent forecasters for which the widely accepted median estimate for production is pegged at a 168.10 million bags against global demand for which is estimated at 171 million bags, leading to the potential for a global coffee deficit of 2.90 million bags for the 2024/25 coffee year.
The Certified washed Arabica coffee stocks held against the New York exchange increase by 16,484 bags yesterday, to register these stocks at 965,715 bags, with 98.23% of these certified stocks held in Europe, at a total of 948,621 bags and the remaining 1.77% being held in the USA at a total 17,094 Bags. Of this, a total 599,027 bags or 62.03% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 10.24% of these certified coffees, from Peru. The pending grading stocks were seen to decrease by 18,966 bags on the day, to register 59,709 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 99.00 Usc/Lb. This equates to 29.76% price discount for the London robusta coffee.
It was a softer day on the commodity markets yesterday, following an announcement from the US Federal Reserve lowering interest rates by 25 basis points, a move largely anticipated by the markets. This, along with the US Dollar setting a new two year high against a basket of other currencies during the session yesterday. The New York Arabica Coffee and Cocoa markets ended the day on a firmer note, whilst the London Robusta Coffee, Corn, Soybean, 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 1.258 Sterling, at 1.034 the Euro and with the US Dollar buying 6.290 Brazil Real.
The New York and London markets started the day yesterday trading on modest softer notes respectively, before tracking lower in the early session in very light volumes. The New York market quickly reversed the trend to make gains during the morning session, gapping higher at the outset, whilst the London market continued a softer path, setting a range for the day. The late morning session saw the New York market drop back from the early highs as there was a degree of selling pressure seen to weigh the market lower. As the afternoon progressed, the London market traded in modest positive territory, albeit in light volumes of trade. The New York market slipped lost some ground from the early highs to trade above par for the remainder of the early afternoon session. The New York market garnered support as the day opened in America, leading to another upward move during the afternoon session, where the market remained steady to set a ceiling for the day. The New York market settled on a very firm note at the close with most of the earlier gains of the day intact. The London market recovered some of the earlier losses of the day during the late session to settle on a softer note at the close, following a comparatively light volume and mostly technical day, with most of the earlier losses of the day intact.
The London market ended the day on a negative note with 85.52% of the earlier losses of the day intact, while the New York market ended the day a positive note, with 80.21% of the earlier gains of the day intact. This mixed close for the markets, with the London market settling near to the lows of the day, with the inversion of the market and the continued large spreads between nearby futures months along with the New York market settling on firmer note with most of the earlier gains of the day intact, does little to indicate direction and one might think that the markets are due for a follow through hesitant steady start to early trade today, against the prices set yesterday, as follows
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 5151 – 65 MAR 332.65 + 7.70
MAR 5139 – 29 MAY 327.40 + 5.50
MAY 5085 – 18 JUL 320.70 + 3.75
JUL 5005 – 25 SEP 311.40 + 3.30
SEP 4901 – 37 DEC 295.35 + 2.65
NOV 4810 – 48 MAR 284.30 + 2.55
JAN 4718 – 57 MAY 274.30 + 2.15
MAR 4648 – 57 JUL 263.90 + 1.70
