I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

20 Apr 2022

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this cut their net long position by 13.71% within the market over the week of trade leading up to Tuesday 12th. April 2022: to register a new net long position of 18,818 which is the equivalent of 3,136,333 bags.  This net long position has most likely been decreased marginally following the period of softer that has since followed.

The July 2022 to July 2022 contract arbitrage between the London and New York markets narrowed yesterday to register this at 126.99 usc/Lb. This equates to 57.28% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 11,575 bags yesterday, to register these stocks at 1,092,133 bags, with 95.41% of these certified stocks being held in Europe at a total of 1,042,024 bags and the remaining 4.59% being held in the USA at a total 50,109. Of this, a total 548,895 bags, or 50.26% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 40.99% of these certified coffees, originating from Honduras. There was meanwhile a 9,275 bags decrease to the number of bags pending grading to the exchange; to register 46,608 bags pending grading on the day.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 3,333 bags over the week of trade leading up to Monday 18th. April to see these stocks registered at 1,561,667 bags, on the day.

It was a softer day on the commodity markets yesterday, weighed by a stronger US Dollar which is seen to be a bearish factor for many of the US Dollar based commodity markets when trading in other currencies. The Cocoa and Soybean markets ended the day on a positive note, while the Sugar, Coffee, Corn, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.303 Sterling, at 1.081 the Euro and with the US Dollar buying 4.666 Brazil Real.

The New York and London markets started the day yesterday trading on a modest firmer note, both the New York and London markets were seen to oscillate around par for the remainder of the morning session before trending in a positive direction during the mid-morning session. As the afternoon progressed the markets dropped back from the morning highs to be set on a softer path, this saw the New York market come under a slight degree of long liquidation pressure to move lower, with the London market following suit albeit in a more sedate manner. Both the New York and the London markets were seen to settle on softer notes at the close.

The London market ended the day on a modest near to unchanged negative note with 30.23% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 56.16% of the earlier losses of the day intact This follow through softer close for the markets does little to inspire confidence and with First Notice day in New York tomorrow the 21st April, this may possibly see the markets set for little better than a hesitant start to early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                NEW YORK USC/LB.

MAY 2074 – 13                                           MAY 221.30 – 2.20
JUL 2088 – 11                                             JUL 221.70 – 2.05
SEP 2095 – 7                                               SEP 221.70 – 1.95
NOV 2100 – 3                                             DEC 221.15 – 1.95
JAN 2099 – 2                                              MAR 220.05 – 2.05
MAR 2095 – 3                                            MAY 218.75 – 2.05
MAY 2091 – 3                                            JUL 216.60 – 2.05
JUL 2088 – 3                                              SEP 213.70 – 2.15