Coffee Market Report

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 159,691 bags during the month of March, to register these stocks at 6,028,979 bags at the end of the month. These port warehouse stocks do include the New York certified coffee stocks that are held within American warehouses of the exchange, but do not include in transit bulk container shipments of privately held coffee or onsite roaster inventories. Therefore if one is to consider the additional unreported stocks and look to end March stocks in North America of an estimated total 7,12 million bags, it would equate to conservatively 13 and a half weeks of roasting activity, that may be viewed as a relatively safe reserve. The question of the drought affected smaller Mitaca crop to come from Colombia is for the interim met and somewhat contracted by positive export performances out of Central America and ahead of the new Peru washed arabica coffee crop to soon begin harvest and so too, the new larger Brazil natural arabica coffee crop to come, where harvest is due to start in the next couple of months.

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market decrease their net long position within the market by 72.87% during the week of trade leading up to Tuesday 11th April; to register a net long position of 2,376 Lots. This net long position which is the equivalent of 673,596 bags has most likely been increased, following the period of mixed but overall buoyant trade, which has since followed.

The July on July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 54.45 Usc/Lb., while this equates to a 43.61% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, with the good discount most likely due to remain in place for the foreseeable future, in line with steady robusta shipments out of Vietnam.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,377 bags on Friday; to register these stocks at 1,408,307 bags. The number of bags pending grading to the exchange registered a further 4,310 bags decline, to see these pending grading stocks at 6,361 bags on the day.

It was an overall steady day on the commodity markets on Friday, with speculative focus turning to the oil markets which tended softer ahead of the meetings of major oil producers held over the weekend, while the US Dollar registered a softer day against other currencies. It was a softer day for Oil markets, Orange Juice, Cotton, Copper, Platinum, a steady day for Cocoa and Coffee, whereas a firmer day in Sugar, and a positive finish for Wheat, Corn, Soybean, Gold, Silver and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.046% higher to see this Index registered at 388.79. The day starts with a steady U.S. Dollar at 1.415 to Sterling and 1.129 to the Euro, while North Sea Oil is softer in early trade and is selling at 39.59 per barrel.

The coffee markets opened the day on Friday on a buoyant note and taking a positive track in the morning session, with London maintaining this stance into the afternoon trade. The New York market took a softer turn to shed some of the gains in the morning, before registering a recovery toward the latter half of the day. The unsteady political arena within Brazil saw the Brazil Real lose ground against the US Dollar on the day, which lacking underlying buyer support toward the end of the day, both markets slipped back into negative territory and after another busy volume day in London, although comparatively quieter day in New York, the prices set with the middle of the day’s trading range, to set the close hardly changed in London and marginally softer in New York on Friday, as follows:

LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.

MAY    1525 + 2                         MAY 122.95 – 0.20
JUL      1552 Unch                      JUL   124.85 – 0.25
SEP      1572 + 2                         SEP   126.60 – 0.25
NOV    1590 + 4                         DEC  128.80 – 0.25
JAN     1605 + 3                         MAR  130.85 – 0.25
MAR   1616 + 3                          MAY 132.40 – 0.30
MAY   1635 + 3                          JUL   133.75 – 0.30
JUL     1654 + 3                          SEP   134.90 – 0.40
SEP     1674 + 3                          DEC  136.40 – 0.55
DEC    1694 + 3                          MAR 137.90 – 0.65