Coffee Market Report

04 Jan 2022 | News

The Brazil government have reported that the country’s green coffee exports for the month of December were 781,867 bags or 18.43% lower than the same month last year, at a total of 3,460,667 bags. This figure is reported versus the Brazil bumper crop that is estimated to have come in at a record 72 million bags in the July 2020 to June 2021 coffee year.  When comparing the export performance from Brazil against the last, similar lower Brazil export year in 2019, the export performance is 9.38% higher against the same month in December 2019.  The current export figures from Brazil are influenced by Covid19 related logistical restraints, updated shipping line reports foresee that these shipment restraints are likely to continue, into the New Year.

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector cut their net long position by 3.79% within the market over the week of trade leading up to Tuesday 28th. December 2021:  to register a net long position of 39,421 lots, which is the equivalent of 11,175,679 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta market will be released later today, due to the holiday observed yesterday, on the 3rd January 2022. 

The March 2022 to March 2022 contract arbitrage between the London and New York markets narrowed yesterday to register this at 115.80 usc/Lb. This equates to 51.86% 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 decrease by 2,870 bags yesterday, to register these stocks at 1,538,204 bags, with 95.99% of these certified stocks being held in Europe at a total of 1,476,538 bags and the remaining 4.01% being held in the USA at a total 61,666 bags.  Of this, a total 699,087 bags, or 45.45% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.52% of these certified coffees, originating from Honduras.  There was meanwhile no change to the number of bags pending grading to the exchange; to register 6,700 bags pending grading on the day.

It was a softer day on the commodity markets yesterday, as the US Dollar firmed against a basket of other currencies pressuring the commodity basket as a whole. The Soybean market ended the day on a firmer note, while the Sugar, Cocoa, Coffee, Wheat, Corn Gold, Silver, Platinum and Palladium markets ended the day on a softer note.  The day starts with the U.S. Dollar trading at 1.347 Sterling, at 1.130 the Euro and with the US Dollar buying 5.682 Brazil Real.   

The New York market trading solo for a shortened day yesterday started the day trading close to par on a modest firmer note, the New York market quickly attracted a degree of selling pressure to see the market trend softer throughout the early morning session. The New York market was seen to hit a floor late during the morning session to limit the losses for the day. As the afternoon progressed the New York market was seen to bounce off the lows of the day and recover to a degree some. The market was seen to settle on a softer note at the close of this short day of trade.

The London market ended the day on Friday on a modest near to unchanged negative note and with 21.43% of the losses of the day intact, while the New York market ended the day yesterday on a likewise negative note and with 50.45% of the losses of the day intact. This follow through softer close for the New York market does little to indicate direction nor does it inspire confidence, one might think that the markets are due for a hesitant steady start to early trade today, against the prices set on Friday in London and yesterday in New York, as follows:     

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

Close: 31/12/2021                                      Close: 03/01/2022                                                                                                                

MAR      2370 – 3                                                MAR      223.30 – 2.80

MAY      2310 – 2                                               MAY       223.30 – 2.70

JUL        2291 – 2                                                JUL        222.60 – 2.65

SEP       2282 – 4                                                SEP        221.80 – 2.70

NOV      2279 – 5                                                    DEC       220.45 – 2.70

JAN       2274 – 5                                                   MAR      219.85 – 2.75

MAR      2267 – 5                                                  MAY      219.35 – 2.65

MAY      2260 – 5                                     JUL      218.65 – 2.70