The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net short position by 4.32% within the market over the week of trade leading to Tuesday 26th September 2023:  to register a new net short position of 16,300 lots, which is the equivalent of 4,620,977 bags. This net short position has most likely been little changed following the period of mixed but overall sideways softer trade that has since followed. 

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector decrease their net long position by 12.71% within the market over the week of trade leading to Tuesday 26th September 2023: to register a new net long position of 23,193 Lots which is the equivalent of 3,865,500 bags. This net long position has most likely been little changed following the period of mixed but overall sideways trade that has since followed.

The Kenyan Ministry of Agriculture has released a report to forecast that the coming October 2023 to September 2024 coffee crop will produce approximately 850,000 bags. This estimate reflects a potential for the coffee crop to come in at a steady production year on year, when compared to the 2022/23 coffee year. The report likewise highlights that the land under coffee production will remain steady at an estimated 108,000 hectares. There are reports coming from the interior that regulatory amendments have led to internal process delays, and the flow of coffee to mills in the interior, seemingly stalled. There is an urgency in the need for resolution to the prevailing stalemate, as this could albeit unintended, have negative consequences for all stakeholders, in farmers’ saleable quality, delays in coffee processing, preparation and export, delays to reach coffee consumer markets, that are by nature risk averse.

The Ivory Coast Agriculture Ministry have announced the official minimum farm gate price for ungraded robusta coffees for their new October 2023 to September 2024 coffee year. The new minimum price of $ 1.46 per Kg at farm gate, is reportedly designed to inspire farmers to plant more coffee. The median estimate forecast for the new October 2023 to September 2024 production coffee year from this second largest African robusta coffee producer nation, is anticipated to reach 1.35 million bags, in total or 8.55% higher than the previous 2022/2023 coffee year.

The main arabica areas in Brazil have completed harvest and weather reports forecast good rainfall to fall across the major coffee growing regions over the days to come.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,128 bags on Friday, to register these stocks at 441,945 bags, with 98.37% of these certified stocks being held in, Europe at a total of 434,760 bags and the remaining 1.63% being held in the USA at a total 7,185 Bags. Of this, a total 131,479 bags, or 29.75% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 64.99% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

The Intercontinental Exchange announced on Friday that it will no longer accept the practice of re-submission and grading of arabica coffees that has previously been certified for delivery and subsequently decertified. In doing this, the ICE will stop the action of older coffees being retrieved from the exchange, represented for grading and re-entering the exchange as fresh stocks without age penalties or price reductions that the exchange applies for coffees that have been stored in the exchange warehouses for years.

The November 2023 to December 2023 contract arbitrage between the London and New York markets narrowed on Friday to register this at 34.48 usc/Lb. This equates to 23.59% price discount for the London Robusta coffee.

It was a softer day on the commodity markets on Friday, with the leading in influence Oil markets lower on the day. The Coffee, Cocoa, Corn, Soybean, Sugar, Wheat, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.219 Sterling, at 1.057 the Euro and with the US Dollar buying 5.032 Brazil Real.

The New York and London markets started the day on Friday trading to the north of par on a modest firmer note respectively. The markets oscillated around par for the remainder of the early morning session, before attracting some degree of selling pressure to see both the New York and London markets drop below par and trend softer during the morning session. As the afternoon progressed, speculative selling returned in volume to the New York floor to trigger stops along the way before finding support to rebound from the earlier lows and recover some of the earlier losses. The London followed suit to drop lower, pressured by selling activity. The New York market was seen to find support late in the day to trend back towards par, and to settle on a softer note at the close, while the London market followed suit to likewise recover most of the earlier losses to settle on a modest softer note at the close.

The London market ended the day on a modest negative note with 30.43% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 46.67% of the earlier losses of the day intact. This follow through softer close for the markets, albeit that both the New York and London markets recovered most of the earlier losses of the day to settle in softer territory, does little to indicate direction and one might therefore think that the markets are due for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:

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

NOV   2462 – 7                                            DEC    146.15 – 1.05
JAN    2339 – 3                                            MAR   147.20 – 1.15
MAR  2312 Unch                                         MAY  147.95 – 1.20
MAY  2282 Unch                                         JUL     148.90 – 1.15
JUL    2270 + 1                                            SEP      149.60 – 1.25
SEP    2256 + 1                                            DEC    150.45 – 1.35
NOV  2245 + 1                                            MAR   151.55 – 1.40
JAN   2234 – 2                                             MAY   152.60 – 1.60