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

Coffee Market Report

30 Dec 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 increased their net long position within this market by 10.55% over the week of trade leading up to Tuesday 22nd. December; to register a new net long position of 20,788 lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.10%, to register a net long position of 60,380 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market raided their net long position within the market by 9.46% to register a new net long position of 21,283 Lots which is the equivalent of 6,033,636 bags. This net long position has most likely been increased, following the period of mixed but overall firmer sideways trade that has since followed.

The March 2021 to March 2021 contract arbitrage between the London and New York markets widened yesterday: to register this at 62.67 usc/Lb. This equates to 49.97 price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 25,030 bags yesterday, to register these stocks at 1,426,469 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,341,842 bags and the remaining 5.9% being held in the USA at a total 84,327 bags. There was meanwhile a larger in number 36,350 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 116,207 bags.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar and New York Arabica Coffee markets ended the day on a positive note, the London Robusta Coffee market remained unchanged on the day, while the Cocoa market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.8335% higher; to see this index registered 452.2686. The day starts with the U.S. Dollar, trading at 1.35 Sterling, at 1.23 the Euro and with the US Dollar buying 5.21 Real.

The New York and London markets started the day yesterday trading on a modest firmer note, as the morning session progressed the New York market trended firmer with the London market continuing to trade around par for most of the session. As the afternoon progressed the New York market continued to firm which saw the market settle on a positive note near to the highs of the day, while the London market remained unchanged on the day.

The London market ended the day unchanged, while the New York ended the day on a positive note with 80.39% of the earlier gains of the day intact. This firmer close might inspire some degree of confidence with the New York market settling near to the highs of the day, one might think the markets are due for a hesitant steady start to early trade today, against the prices set on yesterday, as follows:

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

MAR 1383 Unch                               MAR 125.40 + 2.05
MAY   1393 Unch                                 MAY   127.30 + 2.00
JUL 1408 + 2                                     JUL 128.95 + 2.05
SEP   1424 + 1                                     SEP    130.40+ 2.00
NOV    1440 + 1                                   DEC     131.90 + 2.05
JAN   1456 + 1                                    MAR    133.30 + 2.10
MAR 1471 + 1                                     MAY   133.85 + 2.15
MAY  1489 + 1                                     JUL   134.45 + 2.25