Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector cut their net long position by 10.81% within the market over the week of trade leading up to Tuesday 13th. June: to register a net long position of 20,839 lots, which is the equivalent of 5,907,764 bags. This net long position has most likely been increased following the period of firmer trade that has since followed.
The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market raise their net long position by 4.88% within the market over the week of trade leading up to Tuesday 13th. July: to register a new net long position of 32,673 Lots which is the equivalent of 5,445,500 bags. This net long position has most likely been marginally increased following the period of mixed but overall firmer trade that has since followed.
Weather conditions in Brazil meanwhile remain a point of focus for the terminal markets, with temperatures forecast to drop slightly this week due to the arrival of a mild cold front, this will see temperatures somewhere in the upper single digit figures, in degrees Celsius, for the coming week. Historically the frost threat season for Brazil is foreseen to remain in place until the middle of August, with the climatic contribution of a full moon due for later this week, which traditionally is considered to be an indicator of cooler weather to come. This could likely see a continuation of weather-related market speculation for the days to come.
The September-to-September contract arbitrage between the London and New York markets widened on Friday to register this at 81.20 usc/Lb. This equates to 50.33% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,817 bags on Friday, to register these stocks at 2,188,158 bags, with 93.66% of these certified stocks being held in Europe at a total of 2,049,323 bags and the remaining 6.34% being held in the USA at a total 138,835 bags. Of this, a total 1,150,741 bags, or 52.59% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.78% of these certified coffees, originating from Honduras. There was meanwhile a larger in number 3,382 bags decrease to the number of bags pending grading to the exchange; to register these pending grading stocks at 19,050 bags.
It was a softer day on the commodity markets on Friday, as the commodity markets were pressured by the US Dollar that rallied against many of the world’s major currencies. The Sugar, Coffee, Wheat and Soybean markets ended the day on a positive note, while the Cocoa, Corn, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.376 Sterling, at 1.181 the Euro and with the US Dollar buying 5.115 Brazil Real.
The New York and London markets started the day on Friday trading on a modest firm note. The markets continued to trade in positive territory for the remainder of the early morning session, buoyed by a early degree of buying support within the markets. As the afternoon progressed the New York market started to add more value, accentuating the gains for the day. The London market followed suit with the influence of further weight being added within the New York market, to likewise add more value and gain momentum throughout the session. Both markets hit ceilings late in the day, to limit the gains for the day to some degree but still see the markets settle firmer at the close.
The London market ended the day on a positive note and with 52.38% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 87.76% of the gains of the day intact. This firmer close is a supportive factor for confidence in the market, although there is likely to be some degree of caution and hesitancy for early trade today and thus one might expect to see only a modest follow through support to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
SEP 1767 + 11 SEP 161.35 + 4.30
NOV 1756 + 6 DEC 164.10 + 4.20
JAN 1736 + 2 MAR 166.35 + 4.00
MAR 1718 + 1 MAY 167.35 + 3.85
MAY 1710 + 3 JUL 168.15 + 3.80
JUL 1711 + 5 SEP 168.75 + 3.80
SEP 1719 + 6 DEC 169.45 + 3.70
NOV 1729 + 8 MAR 170.05 + 3.60
