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 increase their net long position within this market by 5.36% over the week of trade leading up to Tuesday 11th. May; to register a new net long position of 41,343 lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.02%, to register a net long position of 79,230 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market raised their net long position within the market by 2.34% to register a new net long position 34,663 Lots, which is the equivalent of 9,826,807 bags. This net long position has most likely been decreased following the period of overall softer trade that has since followed.

The Green Coffee Association of the U.S.A. have announced that the country’s port warehouse stocks increased by 83,405 bags or 1.47% during the month of April, to register these stocks at 5,762,567 bags at the end of the month. Of this total, 91,284 bags were registered in the U.S. Certified coffee stock warehouses at the time of reporting. The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 585,000 bags per week, would conservatively have been at least 1.2 million bags.

The challenges that have arisen due to the ongoing logistical congestion on shipping routes from key producer countries to supply the North American coffee consumer markets, are likely to have played a part in the consecutive month on month draw down of coffees held within these consumer market warehouses.

The increase in stocks reported at the end of April 2021 meanwhile, marks the first month of reported growth to the U.S Green Coffee Stocks since December 2020. The current levels of coffee stocks, which include the certified coffee stocks that are held in certified warehouses and registered to the New York exchange, would equate to more than eleven weeks of roasting activity, which most would consider to be a safe reserve and are likewise still viewed to be above the historic low which was registered by the U.S.A. Green Coffee Association in 2011 at a total 4 million bags.

The July-to-July contract arbitrage between the London and New York markets widened yesterday; to register this at 79.57 usc/Lb. This equates to 54.60% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 50 bags yesterday, to register these stocks at 2,018,660 bags, with 95.48% of these certified stocks being held in Europe at a total of 1,927,376 bags and the remaining 4.52% being held in the USA at a total 91,284 bags. Of this, a total 1,074,656 bags, or 53.24% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 37.60% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register these pending grading stocks at 67,306 bags.

It was a firmer day on the commodity markets yesterday, as the U.S Treasury yields remained subdued on inflation worries in the world’s largest economy. The Sugar, Cocoa, New York Arabica Coffee Soybean, Corn, Gold, Platinum, Silver and Palladium markets ended the day on a positive note, while the London Robusta Coffee and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading marginally weaker at 1.417 Sterling, at 1.217 the Euro and with the US Dollar buying 5.273 Brazil Real.

The New York and London markets started the day yesterday trading on a modest close to par soft note, the markets would gain traction early in the day to be set on a firmer path for the early morning session. As the afternoon progressed both the New York and the London markets came under a degree of selling pressure which saw the markets drop back from the morning highs, the London market hit a floor for the day but bounced back recovery most of the earlier losses to settle near to unchanged for the day, while the New York market bounced off of the lows of the day to gain momentum late in the day which saw the market settle on a modest firmer note at the close.

The London market ended the day on a near to unchanged on a very modest negative note and with 9.10% of the losses the day intact, while the New York market ended the day on a modest firmer note and with 39.47% of the gains of the day intact. This modest firmer close might help to show some sign of direction for the markets, as both markets recovered the earlier in the day losses to see the New York market post some sign of recovery and one might think that the markets are set for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                             NEW YORK USC/LB.

JUL 1459 – 1                                                             JUL 145.75 + 0.75
SEP 1484 – 2                                                            SEP 147.75 + 0.80
NOV 1502 – 1                                                          DEC 150.40 + 0.80
JAN 1515 – 2                                                           MAR 152.65 + 0.75
MAR 1528 – 3                                                         MAY 153.70 + 0.85
MAY 1541 – 2                                                         JUL 154.30 + 0.85
JUL 1555 – 2                                                           SEP 154.60 + 0.85
SEP 1567 – 2                                                           DEC 154.90 + 0.90