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 in their net long position by 3.99% over the week of trade leading up to Tuesday 21st January 2025; to register a new long position at 62,883 Lots. The longer term in nature, Index Fund sector of this market decreased their net long position by 2.81% within the market, to register a new net long position of 38,241 Lots on the day.
Over the same week, the Non-Commercial Speculative sector increased their net long position by 4.62% within the market over the week of trade leading to Tuesday 21st January 2025: to register a new net long position of 51,054 lots, which is the equivalent of 14,473,583 bags. This net long position has most likely been increased further following the period of mixed but overall firmer trade that has since followed. The Commercial sector held 93,571 Lots or the equivalent of 26,526,964 bags net short position on the day, an increase of 1.82% on last.
The Brazil Real currency has strengthened by 5.40% against the US Dollar since the beginning of 2025, a stronger Brazil Real traditionally discourages export selling from Brazil’s coffee producers. The market within the interior continues to reflect price resistance, and a reticence of producers to sell remaining coffee at current market levels.
In the futures markets, New York touched a new record high level of 355.55 US Cents per Lb., during trade yesterday. The continued positive trajectory fuelled by concerns of the Brazil 2025/26 arabica crop potential. The coffee markets are devoid of sellers from all sectors, while the risk averse commercial sector adopt a wait and see stance in these extremely volatile conditions.
The New York arabica futures market has posted a 9.21% increase since the start of 2025 and a 80.14% increase year on year. The London Robusta futures market has posted a 12% increase in futures market value since the start of 2025 and a 67.03% increase year on year.
Within coffee consumer markets meanwhile, the Japanese coffee market that is third in line in non-producer non producer consumer countries, behind the European Union countries and USA as a non-producing coffee consumer market, was valued at 33.99 billion US Dollars in 2023. The Japanese coffee market is characterised by a strong coffee drinking culture and demand for premium, ready to drink and specialty coffee. The Japan Coffee Association has reported that green coffee stocks registered at 2.17 million bags at the end of November 2024, this figure some 6.50% lower than the previous month and around 9.95% lower than the same time in the previous year. Worldwide shipment delays and extended route transit times, as well as higher costs of inventory as well as the inverted futures market, are likely contributing factors toward the lower year on year inventory held in country.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,285 bags yesterday, to register these stocks at 925,650 bags, with 98.04% of these certified stocks held in Europe, at a total of 907,504 bags and the remaining 1.96% being held in the USA at a total 18,146 Bags. Of this, a total 598,083 bags or 64.61% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 10.06% of these certified coffees, from Peru. The pending grading stocks were seen to remain unchanged on the day, to register 13,499 bags pending grading on the day.
The March 2025 to March 2025 contract arbitrage between the London and New York markets widened yesterday, to register this at 101.54 Usc/Lb. This equates to 29.08% price discount for the London robusta coffee.
It was a mixed but overall softer day on the commodity markets yesterday, the commodity markets following the overarching negative moves following an unforeseen liquidation in technology stock. The US Federal Reserve's first policy meeting of 2025 is due to take place tomorrow where it is largely expected that interest rates will remain unchanged. The New York Arabica Coffee and Sugar markets ended the day on a firmer note, while the London Robusta Coffee, Cocoa, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.244 Sterling, at 1.043 the Euro and with the US Dollar buying 5.893 Brazil Real.
The New York market started the day yesterday trading on a very firm note, carrying through momentum from the close on Friday, whilst the London market started the day yesterday trading on a modest firmer note, before tracking lower in the early session in very light volume. The New York market continued to trend in a firmer direction, to make gains during the morning session, gapping higher at the outset to set a new record high for the market, 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 continued to trade in positive territory for the remainder of the session, back from the highs of the day to settle on a firmer note at the close with only some 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.
The London market ended the day on a negative note with 70% of the earlier losses of the day intact, while the New York market ended the day on a positive note, with 20.63% 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, and the New York market dropping back from the day’s highs to settle on a modest firmer note, which does little to indicate direction and one might think that the markets are due for a follow through steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 5460 – 84 MAR 349.20 + 1.65
MAY 5420 – 79 MAY 344.15 + 1.10
JUL 5339 – 77 JUL 337.45 + 1.05
SEP 5240 – 78 SEP 328.35 + 1.15
NOV 5151 – 79 DEC 314.20 + 1.20
JAN 5064 – 81 MAR 303.70 + 1.30
MAR 4986 – 81 MAY 292.10 + 1.05
MAY 4911 – 81 JUL 279.05 + 0.90
