Good day. Welcome to DRWakefield’s Weekly Coffee Market Report!
This report touches upon the Arabica and Robusta coffee futures market, currency pairings and news from origin. See our Market Report Terms page for clarity on any terminology in the coffee market report below.
Live Market Data
Coffee Market Report 20/01/2025
This report covers the period from from Monday 13th January to Friday 18th January, and was written by Phil Searle.
Coffee Market
The NY market opened the week with significantly more volume than the previous Friday and traded within a whopping 11.75 range in the first few hours. 330c/lb was the key figure of the week to be tested. The following day saw the market close lower with light trading volume. The conclusion of the index fund rebalancing drove prices to close just above the 20-day moving average of 320.56. With the index funds now complete, the option expiry of Mar-25 will shift the industry’s attention.
The market found no support as we only flirted with the lows of 320 for the remainder of the week. We continued to jump on the bull train towards the 20-day month high. Origin was active sellers during the week, taking advantage every time we tipped over 330.
As the Bollinger band tightens, we are seeing volume being traded on both sides of the 20-day moving average, with buyers and sellers finding their ‘desired’ levels on either side.
Net short traders will keep a close eye on the spread of Mar-25 vs May-25 as we draw closer to FND. NY rose $1.4 during the week, closing at 328.35c/lb.
COT & Certified Stocks
↑ Non-commercials increased their long position by 7,301 lots.
↑ Commercials increased their long position by 1,240 lots.
Origin
Brazil’s Cecafe published their reports for exports in Dec-24, which totalled 3.8 million bags (3.4 million being arabica), a drop of 8.1% compared to Dec-23. Ongoing infrastructure issues and a shortage of containers caused significant headaches for trading, with over 1 million bags stuck in ports. Even though there was a drop, Brazil’s exports hit a new record high in 2024, rising 28.5% (50.44 million) over the previous record of 44.7 million in 2020.
With the southern area’s harvest concluding in Colombia, the FNC announced that annual production reached 13.9 million bags, making this Colombia’s best harvest in the past 5 years. The planting of resistant coffee varietals and improved climate conditions have aided these figures. Similar to Brazil, the ports of Buenaventura and Cartagena are experiencing container shortages and limited vessel space.
The Tanzanian government secured $1.2 billion to fund the Standard Gauge Railway. This will hopefully speed up inland haulage from Congo, Burundi, Rwanda, and Uganda to Dar es Salaam.
Forecasts for Ethiopia, Kenya and Tanzania 24/25 Crop
Ethiopia – 8.8 million (8.7m in 23/24)
Kenya – 790k (unchanged vs 23/24)
Tanzania – 560k arabica (470k in 23/24)
Currency & Macro Outlook
GBP stumbled against the US$ due to 0.1% lower growth expectations for November. The US$ continued its strong position with retail sales increasing by $0.4 in December, indicating strong consumer demand. This further reinforces the Fed’s cautious approach to rate cuts this year. Governor Waller stated that inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected.
Coffee Market Report 13/01/2025
This report covers the period from from Monday 6th January to Friday 10th January, and was written by Henry Clifford.
Coffee Market
The C Market opened at 318.65 c/lb and although it ticked up to 328.60 c/lb, it could not sustain this momentum and closed at 318.60 c/lb, a few pips above open. The following days did not see ranges as big and on Wednesday the market hit the weekly low of 314.90 c/lb.
Friday saw some bullish sentiment return driven by activity around the February 2025 options expiration. As prices surged through the critical 320 c/lb strike level the market ticked up to 325.85 c/lb but it came back and settled at 323.85 c/lb. With the market settling higher but below 325, early next week, we could see continued volatility, particularly in the 325 to 330 range, as buyers may need to hedge physical short positions prompted by the expiration.
Chatter continues about the weather phenomenon La Nina-last week the US government climate prediction center and NOAA noted in their latest forecast that La Niña conditions emerged in December 2024 and were reflected in below-average sea surface temperatures (SSTs) across the central and east-central equatorial Pacific Ocean. La Niña is associated with wetter conditions in northern Brazil and cooler conditions in the south. If mild in intensity (as currently indicated), it could positively impact moisture restoration, especially in coffee-producing areas. However, given recent frost events, the phenomenon could bring market volatility, particularly if it extends into late autumn and early winter in Brazil.
There are still two sessions left to complete the index fund rebalance ending on Tuesday January 14th. Thus far they have been drip feeding their rebalances successfully with a limited impact on the market.
COT & Certified Stocks
Due to the federal holiday in remembrance of former President Jimmy Carter, no Commitments of Traders (COT) report were released.
Origin
In India, there is now consensus that the Robusta crop is, on average, 8-10% lower than expected. However, differentials are not currently reflecting this as exporters are trying to fill a sizeable sales gap in their books, having sold less than they usually have for this time of year. Once the slack is taken up, we could see differentials firm up again. The consensus from the recent Exporters AGM points to a harvest of 1.16 million bags for Arabica and 4.58 million bags for Robusta.
Change is afoot in this origin. The Coffee Board of India has announced plans to launch the country’s first very own coffee certification process which will help ensure that all coffee is gown, processed and sold in a way that is consistent and of good quality. According the Coffee Board’s figures, roughly 85% of Indian coffee is not certified due to the high cost of becoming certified with the major certifying bodies. Could this different way of certifying coffee help add value to producers? Consultations will be held with all parts of the supply chain later this year to refine the brief.
Currency & Macro Outlook
DXY
The Dollar has been on a march since the Autumn with the Dollar Index (DXY) starting the Coffee Year (October 1st) at 100.76, soaring to 109.18 on Friday 10th January. This 8.3% rise has impacted both British and European roasters whose currency pairs have both suffered as a result. Like we saw in our yearly round up, Dollar strength is exacerbating the pain of this bull market and any easing up of the Greenback’s trajectory would be very welcome.
Will we see any let up or is the Dollar going to continue to rise?
JPMorgan forecasts that the U.S. dollar will maintain its strong position throughout 2025, bolstered by a robust U.S. economy that is set to outpace other developed nations.
GBPUSD vs EURUSD
The Euro fell below 1.03 on January 10, hitting lows last seen in October 2022, as stronger-than-expected US employment growth in December bolstered the Dollar amid expectations of tight Federal Reserve policies. With the ECB expected to cut rates more aggressively than the Fed, many people expect Euro/Dollar parity to occur in the not-too-distant future. The looming shadow of renewed Trump tariffs casts a grey cloud over the Euro.
What about the Pound?
This is in a slightly better position than the Euro as the market expects Trump tariffs to be easier on Britain and also the BoE has signaled it might sit in between the ECB and Fed in their approach to rate cuts. However, it will still likely suffer if the Dollar index continues to strengthen. We ended the week at 1.024 and 1.220 respectively.
Coffee Market Report 06/01/2025
This report covers the period from Monday 30th December to Friday 3rd January 2025, and was written by Priscilla Daniel.
Coffee Market
Welcome to the first coffee market report of 2025! As we step into the New Year, the market has shown a quiet start, with traders closely monitoring developments for potential breakout signals.
The market opened at 322.15 c/lb on Monday, December 30, 2024, and closed slightly lower at 321.30 c/lb on Tuesday, December 31. Trading during these days was rather quiet with limited intraday volatility. Following the New Year holiday on January 1st, the ICE market resumed at 321.55 c/lb and closed the week on Friday, January 3, at 318.65 c/lb. This marked a weekly decline of 3.5 c/lb within the well-established range of 312-333 c/lb.
Coffee prices slid to four-week lows on Tuesday after Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica coffee-producing region, received 102.8 mm of rain last week, equating to 182% of the historical average. This above-average rainfall eased concerns about drought conditions and contributed to the bearish sentiment.
COT & Certified Stocks
↑ Non-commercials increased their long position by 3,597 lots.
↓ Commercials reduced their short positions from by 2,949 lots.
↑ Arabica certified stock level increased to 985,672 bags.
– Arabica pending grading: 34,615 bags
Origin
IHCAFE reported Honduras green coffee exports at 210,513 46-kg bags for the month as of December 27th, compared to 37,542 bags exported during the month of November.
CECAFE reported preliminary Brazilian green coffee exports at a total of 2.96 million 60-kg bags for the month as of December 31st, compared to 4.2 million in the previous month. The total includes 2.5 million bags of arabica and 452k bags of conilon
According to data released last week by the Centre for Monitoring Indian Economy (CMIE), India’s coffee export earnings reached a total of $1.1469 billion in the first eight months of FY 2024-25 (April-November), an increase of 29% over the same period of the previous FY.
Persistent rain in the Central Highlands, Vietnam’s top Robusta coffee-producing area, is hampering the harvest and processing of the beans, which are already behind schedule. “The continuous rainy weather also affects bean quality as they cannot be dried and stored properly” said a local source quoted by Reuters. According to the same source, 20% of beans remained unpicked. Meanwhile, new updated export figures from Vietnam’s General Department of Customs show that shipments fell by 47% to 63,019 tonnes in November. During the first 11 months of the 2024 calendar year, exports fell by 14% to 1.22 million tonnes (20.33 million bags).
Currency & Macro Outlook
GBP ended 2024 as the top-performing G10 currency against the USD, supported by a resilient UK economy. It fell 1.4% overall, reflecting limited divergence in UK-US interest rate expectations, which kept fixed-income investment dynamics stable.
UK house prices rose 0.7% in December, surpassing the 0.1% increase forecast by economists, according to Nationwide.
UK’s energy price cap will increase by 3% in April, following a 1% January hike, as geopolitical instability keeps prices high. This adds pressure on households already struggling with inflation and rising living costs.
In 2024, oil prices dropped 3% due to stalling demand recovery, China’s economic struggles, and increased non-OPEC crude supply. Meanwhile, gold surged over 27%, its largest gain since 2010, fueled by safe-haven demand and rate cuts, pending policy changes under Trump’s presidency.
Global stock markets rose in 2024, driven by falling inflation and robust US growth, with New York shares hitting record highs. Technology stocks led gains despite a brief August dip and a 2.7% December decline. Bond market jitters over inflation tempered optimism. The FTSE 100 marked its best year since 2021, securing gains for a fourth consecutive year. Markets remain cautious as Donald Trump’s upcoming presidency sparks uncertainty over his economic agenda, including tariffs, tax cuts and restrictions.
Interesting fact. According to www.in2013dollars.com, $3.20/lb in 1977 is equivalent to $16.66/lb today, with an increase of $13.46/lb (using an average of 3.5% inflation) over 48 years.
