Coffee Market Report
| 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 reduce their net short sold position within the market by 18.57% over the week of trade leading up to Tuesday 29th. September; to register a net short sold position of 20,116 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.1%, to register a net long position of 25,688 Lots on the day.
Over the same week the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 12.86%, register a net short position of 29,040 Lots. This net short sold position which is the equivalent of 8,232,711 bags has most likely been further reduced, following the period of mixed but overall more positive trade which has since followed and likewise, that of the short position of the Managed Money Funds. The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market reduce their net short sold position within the market by 23.28% over the week of trade leading up to Tuesday 29th. September; to register a net short sold position of 12,073 Lots on the day. This net long that is the equivalent of 2,012,166 bags has most likely been further reduced, over the period of mixed but overall more positive trade that has since followed. The International Coffee Organisation have announced that world coffee exports during the month of August were 2.6% lower than the same month last year, to see exports for the month total approximately 9.1 million bags. This reduced number they have reported has contributed to the world cumulative coffee exports for the first eleven months of the past October 2014 to September 2015 coffee year to have been 2.8% lower than the same period in the previous coffee year, at a total of 101.95 million bags. The same report does however highlight that while the cumulative arabica coffee exports for the first eleven months of the previous coffee year were 2.3% lower than the same period in the previous coffee year and at a total of 62.91 million bags, the cumulative robusta coffee exports were 3.5% lower at a total of 39.04 million bags. This sharper dip in robusta coffee exports does not however reflect an overall shortage of robusta coffee supply, but is rather more related to the internal market price resistance that has prevailed this year within Vietnam, which has slowed the export volumes out of this leading robusta coffee producer. The question still remains what shall happen to the significant past crop robusta coffee stocks that are still being held within Vietnam and now only a week or two depending on the halt to the summer and early autumn rain season prior to the start of the new and potentially larger new crop, which could start along with the improved reference prices of the London market to bring more relatively affordable lower differential robusta coffees to the market. This situation being related very much upon the amount of additional finance that the local banks are prepared to forward to the farmers and internal traders to carry both past crop and new crop stocks, but with perhaps the recent reports of the potential for El Nino to impact negatively upon the next years robusta coffee production within India and Indonesia a factor that shall inspire the Vietnamese farmers and traders to convince their bankers to believe in the concept of holding stocks to take advantage of potentially higher prices to the fore. Meanwhile the potential for these stocks to join the new crop coffees and to still come to the market and with some looking for a home within the certified stocks of the London market, might prove to inspire caution within the speculative sector of the London market. Albeit that the charts are now tending to look a little more positive for the medium term fortunes of the London market, as they do for the more volatile and higher in volume New York market. The second month arbitrage between the markets broadened yesterday, to register this at 57.13 usc/Lb., while this equates to a 43.71% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 845 bags on yesterday; to register these stocks at 1,986,436 bags. There was meanwhile a similar in volume 988 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,800 bags. The Certified Robusta coffee stocks held against the London exchange were seen to increase by 2,000 bags yesterday, to see these stocks registered at 3,376,500 bags. The commodity markets alike the equity markets had a good start to the week yesterday, with the overall macro commodity index taking a positive track for the day. The Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy, while the Cocoa and Gold markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.12% higher to see this Index registered at 396.35. The day starts with the U.S. Dollar steady and trading at 1.516 to Sterling and 1.119 to the Euro, while North Sea Oil is steady is showing a degree of buoyancy in early trade and is selling at 49.05 per barrel. The London and New York markets started the day yesterday with some early buoyancy and with both markets taking a positive track into the afternoon trade, to see a short term reversal back towards par prior to quickly returning to an upside track that inspired by speculative and fund short covering and accompanied by industry buy stops. This positive track was further inspired by the positive nature of overall macro commodity index, which saw coffee join the pack and maintain buoyancy for the rest of the day’s trade. The London market ended the day on a very positive note and with 97.5% of the gains of the day intact, while the New York market ended the day coming off its highs but nevertheless on a positive note and with 61.9% of the gains of the day intact. This close along with more positive looking charts is likely to inspire perhaps a near to steady start for the London market and a steady start for the New York market, against the prices on the close yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. NOV 1609 + 31 DEC 127.55 + 3.25 |
