Coffee Market Report
The traditionally conservative Brazil government food supply and statistics agency CONAB have come forth to report their first forecast for the 2025 new Brazil coffee crop, to indicate the prospect of a 4.40% reduction on crop potential versus the previous crop year. CONAB predict the Brazil 2025/26 coffee year to be a low total 51.80 million bags. This low estimate is reportedly due to adverse weather conditions experienced during crop development and an anticipation that this will lead to slower overall anticipated yield.
The CONAB report released midday in the Brazilian business day yesterday, has projected that the 2025 arabica coffee production will be 12.40% lower than the previous year at a total of 34.70 million bags, while conilon robusta production is forecast to be 17.20% larger than the previous year at a total of 17.10 million bags. The CONAB forecasts are traditionally conservative, many would therefore anticipate this forecast as an indication that the new 2025 Brazil coffee crop is likely to be closer to already published independent forecasts at a median 62.80 million bags. This news meanwhile to indicate that the coming crop year is looking to be slightly below, or on par to the 2024 harvest that most independent forecasters have pegged at 64.50 million bags. This, as the new conilon robusta crop that is estimated by independent forecasters at a median 24.50 million bags is drawing closer to harvest in a few months’ time, and the new Brazil arabica coffee crop that is estimated by independent forecasters at a median 38.30 million bags, continues to develop to maturity with still some time ahead of harvest that is usually anticipated to begin around midyear.
The same report which correlates extensive survey data and inland information gathered, assesses that the coffee yields as an average for both arabica and Conilon robusta in Brazil may decrease marginally, by 2.78% to register 28 bags per hectare for the 2025 year. Meanwhile following on from a drier than average start to the new crop development in quarter four 2024, the weather across the primary coffee growing regions has improved, with sufficient rain improving soil moisture retention and the daytime temperatures temperate. The rain continues to fall in decent dispersion. There are more showers predicted to come to the southeastern arabica coffee growing districts into next week, the nearby weather models indicate that weather is forecast to be conducive.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,000 bags yesterday, to register these stocks at 927,650 bags, with 97.73% of these certified stocks held in Europe, at a total of 906,624 bags and the remaining 2.27% being held in the USA at a total 21,026 Bags. Of this, a total 597,953 bags or 64.46% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 9.95% of these certified coffees, from Peru. The pending grading stocks were seen to decrease by 7,885 bags on the day, to register 5,614 bags pending grading on the day.
The certified warehouse coffee stocks are stored in consumer country warehouses of the exchange in Europe and in the USA. The largest contribution toward the increase in certified stocks is Brazil semi-washed arabica coffee contributing 64.46% and boosted by coffees from Central American washed arabica producer countries. Peru contributes 9.95% and Nicaragua 9.44% of the total held in exchange warehouses.
The washed arabica coffee origins that can deliver to the certified stocks are Brazil, Burundi, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Kenya, Mexico, Nicaragua, Papua New Guinea, Panama, Peru, Rwanda, Tanzania and Uganda. These origins are deliverable to the exchange at varying price premiums or discounts and in view of the prevailing price structure in New York, the prevailing shipping route congestion and extended lead-times aside, may introduce increases to the pending grading stocks to gradually reflect more coffee and increased registrations to the certified stocks in the weeks and months ahead.
The March 2025 to March 2025 contract arbitrage between the London and New York markets widened yesterday, to register this at 105.30 Usc/Lb. This equates to 29.45% price discount for the London robusta coffee.
It was a mixed but overall firmer day on the commodity markets yesterday, ahead of the first US Federal Reserve monetary policy meeting due to begin today. One might comment that the speculative sector has already priced in an unchanged interest rate for the month ahead. The Coffee, Corn, Sugar, Soybean, Wheat, Gold and Silver markets ended the day on a firmer note, while the Cocoa, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.245 Sterling, at 1.044 the Euro and with the US Dollar buying 5.857 Brazil Real.
The New York and London markets opened the day on a positive note, to see the markets continue to trade in firm territory throughout the remainder of the early morning session in limited trade volume. The New York market fell back off the highs of the morning for a brief period during the late morning session, to trade back through par. The London market continued to trade in positive territory, making gains throughout the session. As the afternoon progressed, the New York market continued to trend in a firmer direction, where buyers returned to the floor in the absence of sellers, the day tracked quickly higher to trigger buy stops along the way. This firmer action continued in both the New York and London markets as the day progressed. The New York market continued the upward momentum before being capped late in the day, to see the market settle on a firm note at the close with most of the earlier gains of the day intact. The London market followed suit to also settle on a firm note at the close, with most of the earlier gains of the day intact.
The London market ended the day on a positive note with 90.91% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, with 85.58% of the earlier gains of the day intact. The firmer close for the markets, with both the New York and London markets trading in firmer territory to settle near to the highs of the day in comparatively light volumes for the day. With the speculative sector at the helm and technical moves in play, the markets might be in 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 5560 + 100 MAR 357.50 + 8.30
MAY 5521 + 101 MAY 351.90 + 7.75
JUL 5443 + 104 JUL 345.10 + 7.65
SEP 5344 + 104 SEP 335.95 + 7.60
NOV 5257 + 106 DEC 321.85 + 7.65
JAN 5167 + 103 MAR 310.90 + 7.20
MAR 5089 + 103 MAY 298.05 + 5.95
MAY 5014 + 103 JUL 283.70 + 4.65
