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 decrease their net short sold position within the market by 105.7% over the week of trade leading up to Tuesday 7th. July; to register a net short sold position of 20,996 Lots on the day. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.76%, to register a net long position of 27,792 Lots on the day.
Meanwhile the Non Commercial Speculative sector of this market increased their net short sold position within the market by 82.16% over the same week; to register a net short sold position of 26,486 Lots. This net short sold position which is the equivalent of 7,508,664 bags has most likely been increased again, over the 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 latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market decrease their net long position within the market by 16.23% over the week of trade leading up to Tuesday 7th. July; to register a net long of 20,544 Lots on the day. This net long that is the equivalent of 3,424,000 bags has most likely been marginally increased again, over the period of mixed but overall more positive trade that has since followed. It was inevitable in terms of the competitive North American coffee market that following the dropping of wholesale coffee prices by J. M. Smucker for its dominant Folgers and Dunkin’ Donuts coffee brands, that Kraft Heinz Company announced yesterday that they would be discounting by approximately 5.8%, the wholesale prices of their likewise dominant Maxwell House and Yuban coffee brands. These reduced prices tend to confirm the view that the coffee prices are due to remain within their soft trading range for the foreseeable future and by nature, are somewhat negative for speculative sentiment for the present. The Central Highlands Steering Committee in Vietnam have announced that following the earlier replanting of approximately 61,000 hectares of aged coffee farms within the Dak Lak, Lam Dong, Dak Nong and Gia Lai provinces, that farmers are planning to replant a further 19,224 hectares during the next year end rain season. These actions which result in the replacement of old trees with new higher yielding trees are due to continue and the plan is to replant between 140,000 to 160,000 hectares, over the next five years. This program due to retain Vietnam’s position as the world’s second largest coffee producer and by far the world’s largest robusta coffee producer status, which sees this relatively small country and very impressively, producing more than twice the volume of coffee per annum than the African continent. The arbitrage between the markets has broadened yesterday to register this at 49.97 usc/Lb., while this equates to a 38.80% price discount for the London robusta coffee market. This arbitrage remaining relatively 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 decrease by 3,670 bags yesterday; to register these stocks at 2,152,970 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 11,470 bags. The Certified Robusta coffee stocks held against the London market were seen to increase by 81,833 bags over the two weeks of trade leading up to Monday 6th. July, to register these stocks at 3,192,500 bags. The growth of these stocks has been retarded over the recent months, by the prevailing internal market price resistance within Vietnam. Albeit that the steady shipments of surplus conilon robusta coffee stocks from Brazil has in the meantime, contributed to some degree of buoyancy for these stocks levels. The commodity markets were mixed yesterday, but with the overall macro commodity index showing a degree of buoyancy for the day. The Natural Gas, Sugar, Coffee, Copper, Corn, Soybean and Platinum markets had a day of buoyancy and the Cocoa market was steady, while the Oil, Cotton, Orange Juice, Wheat, Gold and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% higher: to see this Index registered at 425.51. The day starts with the U.S. Dollar relatively steady and trading at 1.548 to Sterling and 1.100 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 56.55 per barrel. The London and New York markets started the day yesterday with a degree of buoyancy and both markets maintained this positive track into the afternoon trade and with both markets starting to build upon their earlier gains, as the afternoon progressed. The New York market was particularly buoyed by the evidence of the extended speculative and managed money fund short sold positions as of last week, which attracted short covering buying and likewise, having some degree of support for confidence within the London market, which allowed both markets to shrug off bouts of selling activity. The London market continued to end the day on a positive note and with 65.2% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 73.9% of the earlier gains of the day intact. This overall positive close might be seen to be mildly supportive for market sentiment, which should see the markets experience some degree of hesitant buoyancy for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1864 + 14 JUL 126.60 + 3.65 |
