Coffee Market Report

by | 11 Oct 2021

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector raise their net long position by 5.85% within the market over the week of trade leading up to Tuesday 5th October:  to register a net long position of 43,940 lots, which is the equivalent of 12,456,795 bags. This net long position has most likely been little changed following the period of mixed but overall marginally 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 of this market cut their net long position by 1.15% within the market over the week of trade leading up to Tuesday 5th October: to register a new net long position of 33,753 Lots which is the equivalent of 5,625,500 bags.  This net long position has most likely been decreased further following the period of marginally softer trade that has since followed.  

The two largest arabica coffee producers, Brazil and Colombia, individually observe national holidays tomorrow in Brazil, the Nossa Senhora de Aparecida which may see many players taking an extended weekend and in Colombia, the Dia De La Raza, today, which will likely see physical coffee trade muted in both countries for the day. 

The November-to-December contract arbitrage between the London and New York markets widened on Friday to register this at 105.32 usc/Lb. This equates to 52.31% 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 increase by 4,873 bags on Friday, to register these stocks at 1,943,189 bags, with 95.34% of these certified stocks being held in Europe at a total of 1,852,682 bags and the remaining 4.66% being held in the USA at a total 90,507 bags.  Of this, a total 1,064,895 bags, or 54.80% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.99% of these certified coffees, originating from Honduras.  There was meanwhile a decrease of 6,775 bags to the number of bags pending grading to the exchange; to register 27,169 bags pending grading on the day. 

It was a firmer day on the commodity markets on Friday, after recently released US Jobs data indicated the possibility that the US Federal Reserve may still look into tapering economic support before the end of the year. The Sugar, Cocoa, New York Arabica Coffee, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the London Robusta Coffee, Soybean, Corn and Wheat markets ended the day on a softer note.  The day starts with the U.S. Dollar trading at 1.365 Sterling, at 1.157 the Euro and with the US Dollar buying 5.506 Brazil Real.   

The New York and London markets started the day on Friday trading on a modest softer note, the markets gained momentum early before coming into a degree of resistance to limit the gains for the morning session, this saw both the London and New York markets drop back and trend softer for the remainder of the morning session. As the afternoon progressed both markets gained support to trend firmer, the New York and London markets would hit a ceiling late in the day limiting the gains for the session. The New York market was seen to settle on a firmer note as the close, while the London market dropped back from the highs of the day to settle on a near to unchanged modest softer note at the close. 

The London market ended the day on a modest close to par negative note and with 18.18% of the losses of the day intact, while the New York market ended the day on a positive note and with 63.30% of the gains of the day intact. This mixed but mostly firmer close might inspire some degree of follow through confidence to possibly set the markets for a steady start to early trade today, against the prices set on Friday, as follows:        

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

NOV     2117 – 2                                                  DEC     201.35 + 3.45

JAN      2116 Unch                                               MAR    204.25 + 3.45

MAR    2081 + 5                                                  MAY     205.20 + 3.30

MAY     2061 + 6                                                    JUL      205.70 + 3.30

JUL      2056 + 7                                                  SEP     206.00 + 3.30

SEP      2059 + 7                                                  DEC     206.20 + 3.20

NOV     2063 + 7                                                  MAR    206.30 + 3.05

JAN     2069 + 7                                                  MAY     206.50 + 3.05