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

Coffee Market Report

22 Jul 2019
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within this market by 17.91%; over the week of trade leading up to Tuesday 16th. July; to register a new net short sold position of 20,863 Lots. This net short-sold position which is the equivalent of 5,914,622 bags has most likely been little changed, following the period of mixed but overall sideways trade that has since followed.

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 42.93 usc/Lb., while this equates to 40.01% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 25 bags on Friday; to register these stocks at 2,363,115 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,376 bags.

The commodity markets and with the US Dollar showing some degree of muscle were mostly on the upside on Friday, to see the overall macro commodity index tending firmer for the day. The Oil, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Soy Bean and Silver markets ended the day on a positive note, while the Natural Gas, Coffee and Gold markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.87% higher; to see this index registered at 398.94. The day starts with the U.S. Dollar steady and trading at 1.250 to Sterling, at 1.122 to the Euro and with the US Dollar buying 3.747 Brazilian Real.

The London and New York markets started the day on Friday trading marginally south of par, but moving back towards par and taking a steady track, into the early afternoon trade. As the afternoon progressed the market remained close to par but with the threat of weekend frost for south east Brazil tending to be seen to be unlikely and accompanied by a weakening of the Brazil Real, both markets tended softer for late trade.

The London market ended the day on a negative note and with 80% of the earlier loses of the day intact, while the New York market ended the day on a likewise negative note and with 81.25% of the earlier loses of the day intact. This softer close and with the Brazil Real remaining softer is unlikely to inspire confidence and one would think that the markets are due little better near to steady start for early trade today, against the prices set on Friday, as follows:

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

JUL 1380 – 13                                             JUL 105.85 – 1.30
SEP 1419 – 8                                              SEP 107.30 – 1.30
NOV 1447 – 9                                             DEC 111.15 – 1.30
JAN 1474 – 8                                              MAR 114.80 – 1.35
MAR 1500 – 7                                             MAY 117.10 – 1.30
MAY 1524 – 6                                             JUL 119.20 – 1.30
JUL 1547 – 5                                               SEP 121.05 – 1.30
SEP 1570 – 5                                               DEC 123.95 – 1.25
NOV 1587 – 5                                              MAR 126.75 – 1.30
JAN 1603 – 5                                               MAY 128.65 – 1.25