Coffee Market Report
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first seven months of the current July 2024 to June 2025 Brazil coffee year, to be 5.70% higher overall, when compared to the same time in the previous coffee year, at a total of 27.45 million bags.
For the first seven months of the current year, Brazil coffee exports are made up of 22.05 million bags of arabica coffee up 7.66% from the same time last year, 5.41 million bags of Conilon robusta coffee, an increase of 22.12% versus the same time last year. The value added and soluble sector reported over the same six months to be 2.70 million bags, a 30.43% increase when compared the same seven months in the previous coffee year.
The Coffee Exporters Association in Brazil Cecafé have reported that the country’s green coffee exports for the month of January are 3.47% lower than the same month last year, to total 3.61 million bags, this number made up of 3.28 million bags of arabica coffee up 0.25% from the same month last year and 328,074 bags of Conilon robusta coffee down 28.81% from the same month last year. It is likely that logistical chokeholds and port congestion that prevails, along with the earlier in the year frontloading of exports to consumer markets in light of the then, looming EUDR regulation implementation, has contributed toward the skewing of the month to month and year on year comparative data, whereas the total exports to consumer markets, at 5.70% increase across the seven months of the Brazil 2024/25 export year, may indicate that there is a limitation to the remaining coffee ahead of the next coming crop, that is not yet commercialised.
The Intercontinental Exchange (ICE) released a notice yesterday after the market close, to increase margin requirements for arabica coffee futures by as much as 60.65%, coinciding with a significant price rally of over 9.42% over the last week of trade. The ICE announced that the initial margin requirement for arabica futures contracts expiring in March 2025 will rise from $8,806.00 to $9,829.00 per contract, marking a 11.62% increase. For further out contracts expiring in May 2027, the requirement will increase from $5,524.00 to $8,873.00 per contract, an 60.65% increase. This is a mechanism that may unusually be actioned when an asset value increases significantly to mitigate trading risk, to reduce market volatility. The upward trajectory in these markets, where the fundamental landscape has not altered as significantly, has had a negative impact in the liquidation pressure for large short position holders.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,862 bags yesterday, to register these stocks at 857,129 bags, with 97.61% of these certified stocks held in Europe, at a total of 836,653 bags and the remaining 2.39% being held in the USA at a total 20,476 Bags. Of this, a total 545,591 bags or 63.65% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 10.53% of these certified coffees, from Peru. The pending grading stocks posted a increase of 5,138 bags on the day, to register 135,214 bags pending grading on the day.
The March 2025 to March 2025 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 157.03 Usc/Lb. This equates to 37.98% price discount for the London robusta coffee.
It was a softer day on the commodity markets yesterday, with a degree of profit taking following record highs for the traditional haven commodity, gold. This ahead of key US inflation data due to be released later today. The Cocoa and Sugar markets ended the day on a firmer note, while the Coffee, Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.244 Sterling, at 1.036 the Euro and with the US Dollar buying 5.765 Brazil Real.
The New York and London markets started the day yesterday trading to the north of par on firmer notes respectively. The New York market finding support in early trade to move into positive territory, the London market continued on a softer path. The buying support within the New York market was short lived, and sellers appeared to absorb the buyers, to see the trend move in softer direction for the remainder of the early morning session. The markets continued on a softer trajectory, with the possible influence of a marginally softer Brazil Real weighing on the day. The arrival of the America’s reflected increased volume and a continuation of speculative selling on the New York floor assisting to trigger stops along the way. The London market followed suit, triggering stops as speculative long liquidation accentuated the negative moves in both markets. The New York market has registered 48,263 lots open interest ahead of first notice day in New York which approaches on the 20th February 2025. The selling activity started to wane toward the end of the days’ trade, the New York market marginally recover some of the earlier losses of the day, whilst the London market recovered most of the earlier losses to reflect a softer close for both the New York and London markets.
The London market ended the day on a negative note with 28.57% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 79.80% of the earlier losses of the day intact. The close, with the New York market settling near to the lows of the day with most of the earlier losses intact, could attract a degree of buyer activity although this may be muted, with first notice day against the prompt month in New York in less than seven7trading days’ time, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 5653 – 18 MAR 413.45 – 15.60
MAY 5663 – 34 MAY 404.40 – 16.70
JUL 5611 – 35 JUL 392.15 – 15.90
SEP 5538 – 35 SEP 382.05 – 15.40
NOV 5459 – 33 DEC 368.05 – 14.65
JAN 5371 – 31 MAR 355.00 – 14.05
MAR 5281 – 31 MAY 339.65 – 13.70
MAY 5145 – 31 JUL 323.15 – 13.70
