I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

28 Jul 2020

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 cut their net short sold position within this market by 9.94% over the week of trade leading up to Tuesday 21st. July; to register a new net short position of 22,313 lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.77%, to register a net long position of 46,263 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market cut their net short sold position within the market by 14.46%, to register a new net short position of 20,293 Lots which is the equivalent of 5,752,976 bags. This net short position has most likely been decreased, following the period of mixed but overall, sideways positive trade that has since followed.

The September to September contract arbitrage between the London and New York markets widened yesterday; to register this at 49.35 usc/Lb. This equates to 44.70% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged to register these stocks at 1,597,752 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,504,260 bags and the remaining 5.9% being held in the USA at a total of 93,492 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 7,451 bags.

It was a modest positive day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a firm sideways track for the day. The Sugar, Cocoa and New York Arabica Coffee markets ended the day on a positive note, while the London Robusta Coffee market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.8608% lower; to see this index registered at 386.9995. The day starts with the U.S. Dollar steady, trading at 1.286 to Sterling, at 1.173 to the Euro and with the US Dollar buying 5.145 Brazilian Real.

The New York and London markets started the day on yesterday trading around par, both markets maintained this modest stance into the early afternoon trade. As the afternoon progressed the New York market gained buying support to trend positive towards the close while the London market attracted a small degree of selling pressure to move onto a negative track for the late afternoon session.

The London market ended the day on a negative note and with 46.15% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 85.11% of the earlier gains of the day intact. This mixed close does little to indicate confidence albeit that the New York market closed on a firm positive note and with the London market settling on a modest negative, might possibly set the markets for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                                           NEW YORK ARABICA USc/Lb.

SEP 1346 – 12                                                                        SEP   110.40 + 2.00
NOV 1361 – 10                                                                      DEC  113.30 + 2.00
JAN 1376 – 9                                                                         MAR 115.20 + 1.90
MAR 1392 – 7                                                                       MAY 116.20 + 1.95
MAY 1407 – 7                                                                       JUL   117.05 + 1.95
JUL 1423 – 7                                                                         SEP   117.90 + 2.00
SEP 1438 – 6                                                                         DEC  119.55 + 2.05
NOV 1456 – 5                                                                       MAR 121.25 + 2.05