The month of November started with trading of the December position (KCZ22) at 161.05, after a sharp 47 cent decline in price that started on October 12. The market took another dip on November 15, going down nearly 10 cents to 156, after a November 14 Federal Reserve meeting where it was signaled that inflation rates were stabilizing and interest rate hikes may begin to slow. The market for the December position stayed in the 150's through the First Notice Day of the position (11/21/2022). Trading moved into the March position (KCH23) on 11/22/2022 and has remained in the range of the 160's.
As Arabica prices trade at 17 month lows, many Brazilian producers have been holding back coffee, creating a tightness in the spot market. Additionally, many Brazilian farmers have maxed out farm related tax deductions and have an incentive to hold off on selling until the new year. On November 22, the USDA revised down harvest projections by 2.6%, which is a bullish (could cause increase) factor on the market. Dry conditions in Brazil are also bullish for prices.
On Monday December 5, Colombia Coffee Growers Federation (FNC) reported November exports were down 25% y/y. Following the release of this information, it was announced that the general manager for the FNC would be stepping down from his position.
On bearish factors (which may cause a drop in price), the Green Coffee Association reports a 5.8% increase (y/y) in global green coffee inventories.
In Ethiopia, cherry prices started at historic highs. The quick drop of the C market has made wet mills unsure of their ability to sell the coffee at current prices, which has lead to many mills to drastically reduce the amount of cherry they are purchasing.
In Nicaragua, harvest is running delayed compared to the 20/21 crop. Internal differentials have risen over the last month. The Mercon team in Nicaragua is advising that those interested in large volumes of Nicaragua coffee consider fixing prices sooner rather than later, as prices are expected to continue rising.
In Vietnam, harvest is beginning in the regions of Da Lat. The team will soon be starting experimental processes and sending the first rounds of samples to Mercon Specialty near the beginning of January.
Spot trading is currently occurring in March 23 (KCZ23). First notice day for March is February 17, at which point all fixations on KCH23 will need to be finalized and spot pricing will be against May (KCK23).
Finca La Virgen Day Lots
The Most Unique Jewels Of Jinotega
Produced by Claudia Rivera in Las Nubes, Jinotega region of Nicaragua. We call these "day lots". They represent something special that Claudia saw on a particular day's harvest. The day's harvest was separated and processed with the highest level of care. Miraculously, these washed day lots each have a unique cup character that represents the tropical sunshine and cool winds of Jinotega.
Madrono Lot: Named after the national tree of Nicaragua, this lot has notes of cocoa with a complex green apple malic acidity, juicy body, vanilla bean, and a lingering finish.
Guardabarranco Lot: Named after the national bird of Nicaragua, this lot features a completely different cup profile from the Madrono. You will find aromas of strawberry, vanilla, with flavors of honey, floral jasmine, soft lemon acidity, peach and a silky body.