Coffee Market Report

by | 07 Sep 2021

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market cut their net long position within this market by 8.95% over the week of trade leading up to Tuesday 31st. August; to register a new net long position 38,657 lots. Meanwhile the longer term in nature Index Fund sector of this market cut their net long position within the market by 0.55%, to register a net long position of 61,302 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market raise their net long position within the market by 10.36% to register a new net long position 33,820 lots, which is the equivalent of 9,587,820 bags. This net long position has most likely been little changed following the period of marginal firmer trade that has since followed.  

The National Coffee Growers Federation in Colombia have reported that the country’s coffee exports for the month of August were little changed at 1,000 bags or 0.09% higher than the same month last year, at a total of 1,132,000 bags. This has contributed to the country’s cumulative coffee exports for the first eleven months of the present October 2020 to September 2021 coffee year to be 264,000 bags or 2.26% higher than the same period in the previous coffee year, at a total of 11,940,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee production for the month of August was 176,000 bags or 16.13% lower than the same month last year, at a total of 915,000 bags. This marks the second report of production statistics from Colombia since April this year. Production data was not published in May or June due to the National protests, which have since subsided. 

The November-to-December contract arbitrage between the London and New York markets narrowed yesterday to register this at 98.56 usc/Lb. This equates to 51.07% 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 remain unchanged yesterday, to register these stocks at 2,162,806 bags, with 94.21% of these certified stocks being held in Europe at a total of 2,037,672 bags and the remaining 5.79% being held in the USA at a total 125,134 bags.  Of this, a total 1,151,885 bags, or 53.26% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.22% of these certified coffees, originating from Honduras.  There was meanwhile no change to the number of bags pending grading to the exchange; to register these pending grading stocks at 4,078 bags. 

The commodity markets lacked the participation of the US markets yesterday, as the country celebrated their labour day public holiday.   The Sugar, Cocoa and London Robusta Coffee markets ended the day on a positive note.  The day starts with the U.S. Dollar trading at 1.384 Sterling, at 1.187 the Euro and with the US Dollar buying 5.169 Brazil Real.  

The London market trading solo opened the day yesterday on a modest softer note, albeit under thin volumes of trade the market gained momentum early to be set on a firmer path for the remainder of the morning session. As the afternoon progressed the market came continued to trend firmer before hitting a ceiling late in the day to limit the gains for the day, which saw the market drop back from the highs of the afternoon and settle on a a firmer note at the close. 

The London market ended the day yesterday on a positive note and with 65.71% of the gains of the day intact, while the New York market ended the day on Friday, on a negative note and with 45% of the losses of the day intact. This firmer close was within an environment of thin trade and provides little indication for direction to possibly set the markets for a near to steady start against the prices set in London yesterday and New York on Friday, as follows:        

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

Close 06/09/2021                                              Close 03/09/2021                                                                                        

NOV     2082 + 23                                                DEC     193.00 – 1.35

JAN      2041 + 16                                               MAR     195.70 – 1.35

MAR    1993 + 16                                               MAY     196.70 – 1.30

MAY     1979 + 17                                                JUL      197.20 – 1.30

JUL      1976 + 19                                                 SEP     197.65 – 1.30

SEP      1975 + 19                                                DEC     198.35 – 1.25

NOV     1980 + 22                                                MAR    198.95 – 1.15

JAN     1990 + 22                                                MAY     199.30 – 1.15