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 6.83% within the market over the week of trade leading to Tuesday 23rd. January 2024: to register a new net long position of 40,736 Lots which is the equivalent of 6,789,333 bags. This net long position has most likely been increased following the period of overall firmer trade that has since followed.

With the month of January almost complete and shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the first 15 days of January are reported as 4.20% higher than the same month last year, at a total of approximately 1,600,000 bags. Shipment statistics for the remainder of the month of January will shortly be released from the Vietnam General Statistics office. The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first 15 days of January 2024, shall be 40% higher than the same period last year, at a total of approximately 283 million US Dollars. These export shipments from Vietnam are anticipated to boost the already trimmed down northern hemisphere consumer market stocks, although following the disruptions of shipments that are being re-routed away from the Suez Canal, this latest development is in logistical terms extending lead times to delivery to these markets.

There are now less than ten trading days within the London market for the Vietnamese trade, prior to the Eve of the Tet Lunar New Year holiday on 10th February 2024. The celebrations are in observance of the new Year which this year will bring in the year of the Dragon, preparations generally begin a week before the event, often to include the journey back to traditional family homes ahead of the celebrations. The celebrations culminate on 17th February 2024 this year. This is likely to see the already subdued trading activity within Vietnam emphasised, as commerce starts to grind to a halt and internal trade is likely to be muted until the middle of February, in what is otherwise an exceedingly industrious nation.

Many of the main coffee districts across the Brazil coffee belt have reported adequate rains thus far for the month of January. Weather forecasters are predicting continued good levels of rainfall and sunshine in equal measure for the week ahead and with cooler daytime temperatures expected from the middle of next week across the main arabica state of Minas Gerias in the latest forecast.

The certified washed arabica coffee stocks held against the New York Exchange continue to register drawdowns, to register two-decade lows at 249,206 bags yesterday. This marks a drawdown of 596,569 bags or 70.54% from the same time last year where the certified washed arabica coffee stocks were registered at 845,775 bags on 29th January 2023. These daily released figures are interpreted by the speculative sector of the markets, as an indication of arabica coffee availability, or lack thereof, in the consumer markets where these exchange certified coffee stocks are held. These certified coffees that are already stored in consumer country warehouses, are usually stored for extended periods of time, and accumulate discounts which would have added incentive for price pressured roasters to draw from these comparatively less expensive certified stocks over the same time.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 5,130 bags on Friday, to register these stocks at 249,206 bags, with 97.81% of these certified stocks being held in, Europe at a total of 243,755 bags and the remaining 2.19% being held in the USA at a total 5,451 Bags. Of this, a total 63,798 bags, or 25.60% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 52.47% of these certified coffees, originating from Honduras. There was meanwhile, an increase of 8,430 bags in the number of bags pending grading to the exchange; to register 73,708 bags pending grading on the day.

The March 2024 to March 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 45.57 Usc/Lb. This equates to 23.51% price discount for the London Robusta coffee.

It was a mixed but overall firmer day on the commodity markets on Friday, the leading in influence Oil markets setting a firmer track on the day. The US Federal Reserve monetary policy meeting due is due to be held tomorrow and Wednesday, investors may look for clues on possible fiscal policy stance on interest rate decisions to come. The Coffee, Cocoa, Platinum and Palladium markets ended the day on a positive note, the Gold market remained unchanged on the day, while the Corn, Sugar, Soybean, Wheat and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.271 Sterling, at 1.084 the Euro and with the US Dollar buying 4.917 Brazil Real.

The New York and London markets started the day on Friday trading to the north of par on firmer notes respectively, carrying through some degree of momentum from the close on Thursday. The support continued to build during the early morning session to see both markets moving in a firmer direction throughout the remainder of the morning session. As the afternoon progressed, the New York market was seen to track upward as speculative buying support continued to support the market, with the London market following suit albeit in a more sedate manner, accentuating the gains for the day. The upward momentum brought sellers back to the floor at the top of the day, to see the London market drop back from the day’s highs during the late afternoon session. The London market fell back towards par and was seen to settle on a firmer note with only some of the earlier gains intact, while the New York market was seen to settle near to the highs of the day at the close.

The London market ended the day on a positive note with 24.32% of the earlier gains of the day intact, while the New York market ended the day on a positive note with 87.90% of the earlier gains of the day intact. This firmer close for the markets, with the New York market settling near to the highs of the day might inspire some degree of follow through momentum, to possibly see the markets set for a follow through steady start to early trade today, against the prices set on Friday, as follows:

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

MAR   3269 + 18                                        MAR   193.85 + 6.90
MAY   3112 + 27                                        MAY    189.45 + 5.75
JUL     3000 + 26                                        JUL      187.95 + 5.05
SEP     2910 + 24                                        SEP      187.60 + 4.75
NOV   2855 + 12                                        DEC     188.30 + 4.60
JAN    2822 + 10                                        MAR    189.35 + 4.50
MAR  2804 + 8                                          MAY     189.55 + 4.20
MAY  2787 + 6                                          JUL       189.65 + 3.95