Coffee Market Report

07 Jun 2022 | News

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 raise their net long position within this market by 26.08% over the week of trade leading up to Tuesday 31st. May; to register a new net long position 33,375 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 5.34%, to register a net long position of 43,459 Lots on the day.   

Over the same week, the Non-Commercial Speculative sector raised their net long position by 31.98% within the market over the week of trade leading up to Tuesday 31st. May:  to register a net long position of 23,453 lots, which is the equivalent of 6,648,821 bags. This net long position has most likely been increased further following the period of overall firmer trade that has since followed. 

The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of May have registered 11.50% lower from the previous month, at 2,322,550 bags. This number is proving to be slightly lower than the 2.50 million bags that had been initially forecast for the month’s coffee exports.  This sees the cumulative export performance for the first eight months of the current October 2021 to September 2022 coffee year in Vietnam, the largest producer of robusta coffee at 2,619,517 bags or 15.27% higher than the same period in the previous year, at a total 19,776,417 bags.

The General Statistics office of Vietnam have at the same time reported the country’s coffee revenue value for the first five months of the 2022 calendar year, is reported at 46.15% higher than the same period in the previous year, at a total of approximately 1.90 billion US Dollars.

The July 2022 to July 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 140.80 usc/Lb. This equates to 59.27% price discount for the London Robusta coffee market. This wide arbitrage may 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 4,875 bags yesterday, to register these stocks at 1,028,352 bags, with 95.51% of these certified stocks being held in Europe at a total of 982,143 bags and the remaining 4.49% being held in the USA at a total 46,209.  Of this, a total 513,126 bags, or 49.90% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.09% of these certified coffees, originating from Honduras.  There reported meanwhile 5,200 bags decrease to the number of bags pending grading to the exchange; to register 2,600 bags pending grading on the day.

It was a mixed but overall firmer day on the commodity yesterday, as investors await US inflation data due to be released later this week which could provide direction on potential interest rate hikes to come. The New York Arabica Coffee, Cocoa, Sugar, Corn, Soybean, Wheat, Silver, Platinum and Palladium markets ended the day on a firmer note, while the London Robusta Coffee and Gold markets ended the day on a softer note.  The day starts with the U.S. Dollar trading at 1.249 Sterling, at 1.068 the Euro and with the US Dollar buying 4.795 Brazil Real.

The New York and London markets started the day yesterday trading on a firmer note, both markets would quickly gain momentum to trend in a firmer direction. The markets hit a ceiling for the morning session which saw both the New York and London markets drop back to trade around par for the remainder of the early morning session. as the afternoon progressed the markets rebounded from the early morning lows to trend firmer while being buoyed by a degree of buying support. The New York market gained upward momentum to quickly trigger buy stops along the way to accentuate the gains for the day.  The London market followed suit with the influence of further weight being added within the New York market, to likewise add more value and gain momentum throughout the session. The New York market closed off the day by dropping back from the late afternoon rally to settle on a firmer note, while the London market dropped back to settle on a modest near to unchanged softer note at the close. 

The London market ended the day a modest near to unchanged negative note with 15.79% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 63.98% of the earlier gains of the day intact. This mixed but overall firmer close might indicate some degree of direction, albeit that the New York market dropped back from the earlier highs of the day, to possibly indicate that markets are due for a steady start to early trade today, against the prices yesterday, as follows:      

   

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

JUL      2133 – 3                                     JUL       237.55 + 5.15

SEP      2140 + 1                                     SEP      237.65 + 5.10

NOV     2128 Unch                                 DEC     237.00 + 5.25

JAN      2112 Unch                                 MAR     235.35 + 5.40

MAR     2106 Unch                                  MAY     233.60 + 5.65

MAY     2101 + 2                                    JUL      231.35 + 5.75

JUL      2098 + 3                                   SEP     228.75 + 5.65

SEP     2091 + 4                                   DEC     226.45 + 5.55