Coffee Market Report

21 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 decrease their net long position within this market by 12.86% over the week of trade leading up to Tuesday 14th June; to register a new net long position 34,831 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 5.42%, to register a net long position of 49,380 Lots on the day.   

Over the same week, the Non-Commercial Speculative sector cut their net long position by 19.36% within the market over the week of trade leading up to Tuesday 14th June:  to register a net long position of 20,658 lots, which is the equivalent of 5,856,451 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. 

Weather conditions in Brazil meanwhile remain cool and dry, with temperatures somewhere in the lower teens in degrees Celsius for the next week which would be seen to be conducive and normal weather conditions for this time of the seasonal year.

The July 2022 to July 2022 contract arbitrage between the London and New York markets remained unchanged yesterday to register this at 133.98 usc/Lb. This equates to 58.86% 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 with the exchange closed for the Juneteenth holiday remained unchanged yesterday, to register these stocks at 991,657 bags, with 95.47% of these certified stocks being held in Europe at a total of 946,743 bags and the remaining 4.53% being held in the USA at a total 44,914.  Of this, a total 478,428 bags, or 48.25% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 42.47% of these certified coffees, originating from Honduras.  There was meanwhile a 5,200 bags decrease to the number of bags pending grading to the exchange; to register 5,849 bags pending grading on the day.

The commodity markets lacked the participation of many of the U.S.A based markets yesterday, which were closed due to the Juneteenth holiday on Monday the 19th June, to provide no direction for the overall macro commodity index for the day. The Platinum and Palladium markets ended the day on a firmer note, while the London Robusta Coffee, Gold and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.227 Sterling, at 1.052 the Euro and with the US Dollar buying 5.189 Brazil Real.

The London market trading solo yesterday started the day trading on a modest firmer note, the market quickly gained momentum supported in early trade some degree of buoyancy this was however short lived as the market was capped during the mid-morning session to drop back and trend towards par. As the afternoon progressed the London market continued to be driven lower by mostly speculative selling activity under very slim volumes of trade. The market was seen to rebound from the lows of the day and rally late in the day to settl near to unchanged on a modest softer note at the close.

The London market ended the day yesterday on a modest near to unchanged negative note with 5.56% of the earlier losses of the day intact, while the New York market ended the day on Friday on a negative note with 83.50% of the earlier losses of the day intact. This modest softer close for the London market trading solo on the day, does little to indicate direction and with first notice day approaching on the prompt month in New York tomorrow the 22nd June, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set on Friday in New York and yesterday in London, as follows:   

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

Close: 20/06/2022                                Close: 17/06/2022                                                                                                                                                 

JUL      2065 – 1                                     JUL       227.65 – 4.30

SEP      2079 – 2                                     SEP      227.40 – 4.40

NOV     2074 – 5                                    DEC     226.30 – 4.45

JAN      2059 – 6                                      MAR     224.60 – 4.50

MAR     2049 – 5                                     MAY     223.15 – 4.40

MAY     2044 – 7                                    JUL      221.45 – 4.20

JUL      2041 – 8                                   SEP     219.45 – 4.05

SEP     2035 – 10                                 DEC     217.60 – 3.95