In the latest round of independent Brazil crop forecast updates, the consultancy and commodity broker StoneX has come forth with their report to forecast Brazil coffee production could potentially be around 67 million bags the coming July 2024 to June 2025 coffee year, an increase of 4.20% from the current year. Their forecast anticipates 44.30 million bags of mostly natural arabica coffee to come from this leading producer that is 3.60% higher than the current 2023/2024, along with an estimated 22.70 million bags Conillon robusta coffee, 5.50% up from the current 2023/2024 year. This estimate is in line with the median average of independent forecasters who foresee on average, the overall Brazil 2024/2025 coffee production to potentially reach 68 million bags. StoneX have similarly reported their observation, which aligns for the most part with other international independent field surveys, that Brazil the estimated potential production for the coming 2024/2025 coffee year has likely been reduced due to the El Niño related record high temperatures and dry weather experienced in varying severity in the coffee areas over the last couple of months of 2023.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to remain unchanged yesterday, to register these stocks at 307,262 bags, with 98.44% of these certified stocks being held in, Europe at a total of 302,457 bags and the remaining 1.56% being held in the USA at a total 4,805 Bags. Of this, a total 114,094 bags, or 37.13% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 39.12% of these certified coffees, originating from Honduras. The pending grading stocks are registering daily increases and yesterday, there were a further 18,240 bags increase to the number of bags pending grading to the exchange; to register 126,982 bags pending grading on the day.

The May 2024 to May 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 43.99 Usc/Lb. This equates to 23.39% price discount for the London Robusta coffee.

It was a softer day on the commodity markets yesterday, with the leading in influence Oil market firmer on the day. The Coffee and Cocoa markets ended the day on a positive note, the Sugar market remained unchanged on the day, while the Corn, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.264 Sterling, at 1.082 the Euro and with the US Dollar buying 4.937 Brazil Real.

The New York market started the day trading on a modest firmer note, while the London market started the day yesterday trading south of par in softer territory. Both markets quickly trended firmer, as support was seen to build during the early morning session. This support was short lived as the markets soon hit a ceiling for the morning, to limit the gains for the morning session to see both the New York and London markets trend back towards par during the late morning session. As the afternoon progressed the markets hit a floor, to reverse the trend and track upward as speculative buying support returned to the floor. The New York and London markets continued to gain momentum to rally late in the day around the opening of business day in the Americas’, in modest volumes of trade, both markets continued to move in a firmer direction accentuating the gains for the day. The upward momentum brought sellers back to the floor at the top of the day, and the New York market hit a ceiling very late in the day to limit the sessions gains. The New York market settled near to the highs of the day on a very firm note, while the London market followed suit to likewise settle on a firmer note with most of the gains of the day intact.

The London market ended the day on a positive note with 91.18% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 71.15% of the earlier gains of the day intact. This firm close for the markets, with the New York and London markets tracking upward throughout the session to maintain most of the earlier gains of the day, with first notice day on the prompt month in London on the 26th February, one might think that the markets are possibly set for a steady follow through start to early trade today, against the prices set yesterday, as follows:

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

MAR   3252 + 4                                           MAY   188.10 + 1.85
MAY   3177 + 31                                         JUL     186.65 + 1.60
JUL     3112 + 30                                         SEP     186.35 + 1.35
SEP     3051 + 31                                         DEC   186.55 + 1.45
NOV   2988 + 29                                         MAR  186.80 + 1.55
JAN    2933 + 28                                         MAY   187.25 + 1.70
MAR  2905 + 28                                         JUL     187.40 + 1.80
MAY  2883 + 26                                         SEP     187.30 + 2.00