The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net long position by 5.82% within the market over the week of trade leading to Tuesday 28th. May 2024: to register a new long position of 43,787 lots, which is the equivalent of 12,413,421 bags. This net long position has most likely been increased further following the period of mixed but overall firmer trade that has since followed.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector increase their net long position by 14.46% within the market over the week of trade leading to Tuesday 28th. May 2024: to register a new net long position of 24,721 Lots which is the equivalent of 4,120,167 bags. This net long position has most likely been increased further following the period of mixed but overall firmer trade that has since followed.

The Indonesian government trade data from Sumatra, the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of April were 57,015 bags or 46.43% lower than the same month last year, at a total of 65,768 bags. This marks the first month of the new April 2024 to March 2025 coffee year, for which the new coffee crop which is around 85% robusta coffee and the balance arabica coffee, has been conservatively forecast to potentially reach a median of 10.90 million bags. This country has historically recorded wide differences in production estimates and outcome from year to year, factors such as biennial bearing in a comparatively low yielding environment, as well as influences that are not production oriented, internal local coffee retention and growing coffee consumption, speculative cash and carry, as well as value add manufacturing activities, contributing toward some degree of complexity in forecasts, and anticipated export performance. The prevailing buoyant coffee futures market environment has seen internal market prices from this mainly robusta producing nation increase against the higher reference price in London for robusta coffee. This firmer market environment may see producers selective in coming to the market so long as the shortfall in availability from Vietnam persists. These prices may see firm competition develop within the internal market in Indonesia, between the local domestic and relatively well-developed consumer sector within this country, versus export consumer markets. The latter may be inclined to wait it out a little for any sign of some value within the context of the overall historically expensive robusta market, for new coffee harvest to start to flow. Indonesia robusta coffee is historically a more comfortable fit and closer to European roasters shores, than the alternative Brazil Conillon, while both countries with mid-year new crop harvests currently under way required to fill in the gaps that have come about by the climatically induced shortfall from largest producer of robusta coffee, Vietnam.

Safras & Mercado have estimated that almost 21% of the new Brazil coffee crop has already been harvested, as of the 28th May 2024. The harvest this year is at a marginally faster pace, when compared to the same time last year which was reported at 20%. Based on their forecast for a new crop of 69.50 million bags, the report would indicate that so far approximately 14.60 million bags of the new crop coffee have been harvested, the coffee made up of around 6.95 million bags of Conillon robusta coffee, that is anticipated to come in at 23.20 million bags and approximately 7.65 million bags of arabica coffee harvested thus far, of a total estimated by Safras & Mercado to come in at 46.30 million bags. As the harvest progresses, the pattern that has emerged in the earlier to start harvest robusta areas, is emulated in the arabica areas and reports of lower bold bean intake persist when compared to the harvest results of the same time last year. This has seen further sales of bolder bean grades somewhat stalled with the internal market traditionally already committed to forward sales. The internal market prices for bolder bean grades continue to gradually climb in line with the reports from the interior. Within Brazil meanwhile farmers are generally well financed through successes of coffee harvest in the past, heading into the peak of arabica harvest as reluctant sellers.

The winter weather in the southern hemisphere is likely to contribute toward the speculative directional influence in the futures markets meanwhile, and accentuated volatility is anticipated through the next few months. The latest weather reports within Brazil are indicating that cooler weather is set to prevail for the week ahead, with temperatures in the low to mid-teens in degrees Celsius.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to decrease by 1,595 bags on Friday, to register these stocks at 784,771 bags, with 99.29% of these certified stocks held in, Europe at a total of 779,182 bags and the remaining 0.71% being held in the USA at a total 5,589 Bags. Of this, a total 389,860 bags, or 49.68% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 16.79% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 2,794 bags; to register 28,069 bags pending grading on the day.

The July 2024 to July 2024 contract arbitrage between the London and New York markets narrowed on Friday, to register this at 35.47 Usc/Lb. This equates to 15.95% price discount for the London Robusta coffee.

It was a softer day on the commodity markets on Friday, following US inflation data released on Friday that was in line with expectations, with many investors looking ahead to potential interest rate cuts to come later in the year. The Cocoa, Sugar and Platinum markets ended the day on a positive note, while the Coffee, Corn, Soybean, Wheat, Gold, Silver and Palladium market ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.274 Sterling, at 1.085 the Euro and with the US Dollar buying 5.246 Brazil Real.

The New York and London markets started the day on Friday trading to the north of par, gaining support early to continue to trend firmer on the back of the close from Thursday. The markets were seen to hit a ceiling during the early morning session to set a new high for the day, before encountering resistance to drop back from the early highs, pressured by selling in the markets. As the afternoon progressed the volume increased, to contribute to the day’s direction with speculative selling pressuring the New York market lower as stops were triggered along the way. The London market followed suit and the markets continued to project lower with a measure of speculative long liquidation to accentuate the losses for the day’s trade. The late afternoon session saw the markets rebound slightly off the lows of the day to recover a small degree of losses, to see the markets settle on a softer note at the close.

The London market ended the day with 79.37% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 85.54% of the earlier losses of the day intact. This softer close for both New York and London markets, with the markets pressured lowered throughout the session to settle near to the lows of the day, might see the markets set for a hesitant start to early trade today, against the prices set on Friday, as follows:

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

JUL     4120 – 150                                       JUL    222.35 – 10.65
SEP     3987 – 144                                       SEP    221.25 – 10.70
NOV   3854 – 143                                       DEC   219.80 – 10.75
JAN    3720 – 146                                       MAR  218.55 – 10.90
MAR  3627 – 135                                       MAY  217.45 – 11.00
MAY  3564 – 133                                       JUL     216.75 – 10.95
JUL    3498 – 133                                       SEP     215.85 – 10.75
SEP    3406 – 133                                       DEC   215.15 – 10.50