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

Coffee Market Report

11 Jan 2021

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector cut their net long position by 5.56% within the market over the week of trade leading up to Tuesday 5th. January: to register a new net long position of 21,837 which is the equivalent of 6,190,693 bags.  This net long position has most likely been decreased, following the period of mixed but overall softer trade that has since followed.  

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market cut their net long position within the market by 2.49% over the week of trade leading up to Tuesday 5th. January: to register a new net long position of 4,339 Lots which is the equivalent of 723,167 bags.  This net long position has most likely been decreased, following the period of mixed but overall softer sideways trade that has since followed.

The March 2021 to March 2021 contract arbitrage between the London and New York markets widened on Friday: to register this at 63.92 usc/Lb. This equates to 51.67` 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 17,975 bags on Friday, to register these stocks at 1,484,998 bags, with 94.3% of these certified stocks being held in Europe at a total of 1,399,655 bags and the remaining 5.7% being held in the USA at a total 85,343 bags. There was meanwhile a larger number 21,295 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 73,385 bags.

It was a softer day overall on the commodity markets on Friday, to see the overall macro commodity index taking something of a sideways track for the day. The New York Arabica Coffee market ended the day on a positive note, the Sugar market remained unchanged on the day, while the Cocoa and London Robusta Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.9032% lower; to see this index registered 465.0901. The day starts with the U.S. Dollar, trading at 1.350 Sterling, at 1.217 the Euro and with the US Dollar buying 5.418 Real.

The New York and London markets started the day on Friday trading on a modest positive note, the New York market continued to trend firmer for the remainder of the morning session, while the London market trended softer for the morning session. As the afternoon progressed the New York market buoyed by some degree of buying support, climbed further into positive territory to accentuate the gains for the day and see the market settle near to the highs of the days trade, while the London market continued to drop back form the morning highs, to see the market settle near to the lows of the day’s trade.

The London market ended the day on a negative note with 81.81% of the earlier losses of the day intact, while the New York ended the day on a modest positive note with 88.14% of the earlier gains of the day intact. This mixed close does little to indicate direction, albeit that the New York markets recovered from the earlier in the day losses to settle near to the highs of the day, one might think that the markets are due for a hesitant steady start to early trade today, against the prices set on Friday, as follows:

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

MAR 1318 – 18                                          MAR 123.70 + 2.60
MAY 1329 – 18                                          MAY 125.75 + 2.65
JUL 1344 – 16                                            JUL 127.60 + 2.65
SEP 1363 – 13                                            SEP 129.35 + 2.75
NOV 1381 – 10                                          DEC 131.35 + 2.85
JAN 1397 – 10                                           MAR 133.15 + 2.90
MAR 1413 – 9                                           MAY 133.95 + 2.90
MAY 1430 – 9                                           JUL 134.70 + 2.90