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 short sold position within the market by 8.91% over the week of trade leading up to Tuesday 19th. December; to register a new net short sold position of 56,901 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 7.84%, to register a net long position of 35,732 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 4.63%, to register a net short sold position of 58,061 Lots. This net short sold position which is the equivalent of 16,460,036 bags has most likely been once again decreased, following a period of mixed but overall more positive trade that has since followed and likewise, that of the managed money fund sector of the market.
The General Statistics Office in Vietnam have with the month of December nearly complete, estimated that coffee exports for the month shall total approximately 2.33 million bags. This they report shall contribute towards the coffee exports for 2017 to be 20.1% lower than the previous year, at a total of approximately 23.3 million bags.
The fall in coffee exports from Vietnam this year and of mostly robusta coffees, has not actually put too much pressure on robusta coffee supply through the year, as the consumer markets while experiencing tighter supply and price buoyancy through most of the year, have nevertheless been in receipt of sufficient hand to mouth robusta coffee supply. While with the forecast for a significantly larger new Vietnam coffee crop that is passing its peak harvest at present, there are no concerns over medium to longer term robusta coffee supply. A factor that is reflected within the prevailing softer price trading range for the London market.
The March 2018 to March 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.89 usc/Lb., while this equates to 37.66% 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 2,169 bags yesterday; to register these stocks at 1,967,984 bags. There was meanwhile a larger in number 4,697 bags increase to the number bags pending grading for this exchange; to register these pending grading stocks at 56,585 bags.
The commodity markets returned to the field of play yesterday for a short week of trade, with the overall macro commodity index taking a positive track for the day. The Natural Gas, Sugar, New York arabica Coffee, Copper, Gold and Silver markets had a day of buoyancy and the London robusta Coffee markets ended off on a near to steady note, while the Oil and London Cocoa markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.52% higher; to register this index at 415.69. The day starts with the U.S. Dollar tending softer and trading at 1.343 to Sterling, at 1.193 to the Euro and 3.315 to the Brazilian Real, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 66.20 per barrel.
The London and New York markets started the day yesterday trading mostly on the positive side of par, with both markets maintaining this steady stance into the early afternoon trade. As the afternoon progressed the London market started to come under pressure and to head south into negative territory, while the New York market maintained its positive stance and with speculative short covering coming into play, to trigger buy stops and to accentuate the gains, while the London market bounced back from the lows and back towards par.
The London market ended the day on a near to steady note and having recovered 87.5% of the earlier losses of the day, while the New York market ended the day on a very positive note and with 92% of the earlier gains of the day intact. This close is likely to inspire a degree of confidence, which is likely to set the markets for a follow through steady to perhaps even buoyant start for early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JAN 1706 – 5
MAR 1711 – 1 MAR 124.50 + 2.30
MAY 1721 – 1 MAY 126.85 + 2.25
JUL 1758 – 3 JUL 129.20 + 2.20
SEP 1766 – 5 SEP 131.55 + 2.20
NOV 1775 – 5 DEC 135.00 + 2.15
JAN 1784 – 6 MAR 138.35 + 2.10
MAR 1796 – 6 MAY 140.40 + 2.05
MAY 1821 – 6 JUL 142.35 + 2.05
JUL 1853 – 6 SEP 144.25 + 2.05