Coffee Market Report

12 Jan 2022 | News

With the month of December complete, 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 December were 279,617 bags or 103.47% higher than the same month last year, at a total of 549,868 bags. This contributes to the islands cumulative robusta coffee exports for the first three months of the current October 2021 to September 2022 coffee year to be 294,137 bags or 24.56% lower than the same period in the previous year, at a total of 902,553 bags. 

The March 2022 to March 2022 contract arbitrage between the London and New York markets widened yesterday to register this 134.18 usc/Lb. This equates to 56.60% 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 33,302 bags yesterday, to register these stocks at 1,459,355, with 95.82% of these certified stocks being held in Europe at a total of 1,398,339 bags and the remaining 4.18% being held in the USA at a total 61,016.  Of this, a total 660,233 bags, or 45.24% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.45% of these certified coffees, originating from Honduras.  There was meanwhile an increase of 2,250 bags to the number of bags pending grading to the exchange; to register 8,195 bags pending grading on the day.

It was a firmer day on the commodity markets yesterday, the US Dollar lost ground against a basket of other currencies yesterday. A weaker US Dollar is seen to be a bullish factor for many of the US Dollar based commodity markets when trading in other currencies.  The Sugar, Cocoa, Coffee, Wheat, Corn, Soybean, Gold, Silver, Platinum and Palladium markets ended the day on a firmer note.  The day starts with the U.S. Dollar trading at 1.364 Sterling, at 1.138 the Euro and with the US Dollar buying 5.569 Brazil Real.   

The New York market started the day yesterday trading on a firmer note, while the London market started the day yesterday trading on a near to par negative note, with both markets tracking firmer for the remainder of the early morning session.   The New York market was seen to attract a degree of buying support in technical trade, whilst the London market followed suit. As the afternoon progressed the markets would hit a ceiling, limiting the gains for the session.  

The markets slipped back to levels near to par, however both the New York and the London markets tracked higher into the later afternoon session.  The London market encountered resistance late in the day to drop back losing some of the earlier gains of the day and settle on a modest near to unchanged firmer note.  The New York market continued to gain momentum to see the market settle on a firmer note at the close, with most of the gains of the day intact.

The London market ended the day on a near to unchanged positive note and with 33.33% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 66.15% of the gains of the day intact. This firmer close with the New York market gaining momentum late in the day 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 yesterday, as follows:      

   

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

MAR      2268 + 8                                                 MAR      237.05 + 2.15

MAY      2216 + 5                                               MAY       237.00 + 2.05

JUL        2204 + 3                                                JUL        236.40 + 1.75

SEP       2199 + 1                                               SEP        235.70 + 1.50

NOV       2197 Unch                                               DEC       234.30 + 1.20

JAN       2194 Unch                                              MAR      233.55 + 1.00

MAR      2187 Unch                                              MAY      232.85 + 0.80

MAY      2180 Unch                                 JUL      231.85 + 0.55