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 switch increase their net short position by 36.37% within this market over the week of trade leading up to Tuesday 8th. November 2022; to register a new net short position at 14,163 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position by 2.58% within the market, to register a new net long position of 36,265 Lots on the day.    

Over the same week, the Non-Commercial Speculative increase their net short position by 32.54% within the market over the week of trade leading to Tuesday 8th. November 2022: to register a net short position of 19,338 lots, which is the equivalent of 5,482,237 bags. This net short position has most likely been little changed following the period of mixed but 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 fell by 58,321 bags or 0.91% during the month of October, to register these stocks at 6,320,157 bags at the end of the month. This compares with 46,816 bags drawdown reported in the same month last year. Of this total, 52,958 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 595,000 bags per week, would conservatively have been 1.8 million bags.

The December 2022 to January 2023 contract arbitrage between the New York and London markets narrowed yesterday to register this at 75.01 usc/Lb. This equates to 47.85% price discount for the London Robusta coffee market. This wide arbitrage may 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 remain unchanged yesterday, to register these stocks at 468,291 bags, with 88.69% of these certified stocks being held in Europe at a total of 415,333 bags and the remaining 11.31% being held in the USA at a total 52,958. Of this, a total 286,126 bags, or 61.11% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 33.24% of these certified coffees, originating from Honduras. There were meanwhile 57,686 bags increase to the number of bags pending grading to the exchange; to register 598,716 bags pending grading on the day.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 16,833 bags over the week of trade leading up to Monday 14th. November to see these stocks registered at 1,492,833 bags, on the day.

It was a mixed day the commodity markets yesterday, international macroeconomic inflationary pressures in the northern hemisphere consumer markets, continue to weigh in on sentiment. The Sugar, Cocoa, Corn, Soybean, Wheat, Gold and Palladium markets ended the day on a positive note, while the Coffee, Silver and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.184 Sterling, at 1.034 the Euro and with the US Dollar buying 5.333 Brazil Real.

The New York and London markets started the day yesterday trading on a modest near to par firmer note, both markets continued to oscillate to the south of par for the remainder of the early morning session. The late morning session saw both the New York and the London markets attract a further degree of selling pressure to see the markets trend in a negative direction. As the afternoon progressed, both the New York and the London came under severe selling pressure in mainly technical trade. The news of the increased number of bags reported against the number of bags pending grading to the Certified stocks, adding to the overall bearish sentiment within New York, as first notice day in the prompt month approaches, on Monday. It was a hefty day of activity in New York as rolling activity continued out of the prompt month. The structure against the first futures months registered a correction yesterday, while the further forward months, still reflect a very narrow inverted spread. The markets continued to project lower with further long liquidation selling to accentuate the losses for the day’s trade. Late in the day both the New York and London markets would hit a floor, before finding support to recover some of earlier losses of the day. This saw both the New York and the London market settle on softer notes respectively at the close.

The London market ended the day on a negative note with 78.57% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 78.10% of the earlier losses of the day intact. This very soft follow through close for the markets and with both the New York and London markets settling near to the lows of the day, one might see the markets set for a hesitant start to early trade today, against the prices set yesterday, as follows:

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

JAN    1802 – 22                                      DEC   156.75 – 9.45
MAR  1788 – 27                                      MAR  159.50 – 7.40
MAY  1780 – 28                                      MAY   160.30 – 6.40
JUL    1776 – 27                                      JUL     160.50 – 6.00
SEP    1773 – 26                                      SEP     160.35 – 5.70
NOV  1767 – 26                                      DEC    160.20 – 5.50
JAN   1775 – 27                                      MAR   160.90 – 5.30
MAR 1784 – 27                                      MAY    161.35 – 5.20