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

Coffee Market Report

30 Jun 2020

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 this market by 20.36% over the week of trade leading up to Tuesday 23rd. June; to register a new net short position of 27,565 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 44,117 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within the market by 14.56%, to register a new net short position of 27,669 Lots which is the equivalent of 7,844,039 bags. This net short position has most likely been further increased, following the period of mixed but overall softer trade that has since followed.

The September to September contract arbitrage between the London and New York markets widened yesterday; to register this at 46.67 usc/Lb. This equates to 46.62% 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 9,333 bags yesterday; to register these stocks at 1,653,238 bags, with 92.3% of these certified stocks being held in Europe at a total of 1,534,731 bags and the remaining 7.7% being held in the USA at a total of 118,507 bags. There was meanwhile a smaller in number 4,144 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,938 bags.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive sideways track for the day. The Coffee markets ended the day on a positive note, while the Sugar and Cocoa markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 2.0872% higher; to see this index registered at 360,1546. The day starts with the U.S. Dollar steady, trading at 1.229 to Sterling, at 1.122 to the Euro and with the US Dollar buying 5.403 Brazilian Real.

The New York and London markets started the day yesterday trading on a positive note, both markets started to attract buying support to trend very positive for the early afternoon trade. As the afternoon progressed both the London and the New York markets maintained their respective positive stance. Late in the afternoon session both markets dropped back off the highs of the day to close on a positive note for the day.

The London market ended the day on a positive note and with 62.50% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 49.59% of the earlier gains of the day intact. This firmer close, albeit that the markets dropped off the highs of the day late in the afternoon session, might inspire some degree of confidence to possibly set the markets for a follow-through steady start to early trade today, against the prices yesterday, as follows:

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

SEP 1178 + 25                                                                      SEP 100.10 + 3.45
NOV 1196 + 24                                                                     DEC 102.50 + 3.55
JAN 1214 + 23                                                                      MAR 104.30 + 3.25
MAR 1229 + 20                                                                     MAY 105.35 + 3.05
MAY 1247 + 18                                                                     JUL 106.45 + 2.85
JUL 1265 + 16                                                                       SEP 107.55 + 2.70
SEP 1278 + 13                                                                       DEC 109.20 + 2.60
NOV 1293 + 10                                                                     MAR 110.80 + 2.50