Coffee Market Report
| 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 the market by 35.81% during the week of trade leading up to Tuesday 22nd. December; to register a net short sold position of 21,545 Lots. This net short sold position which is the equivalent of 6,107,912 bags has most likely been little changed, following the period of mixed but mostly sideways trade, which has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market decrease their net short sold position within the market by 9.32% over the week of trade leading up to Tuesday 22nd. December; to register a net short sold position of 23,539 Lots on the day. This net short sold position that is the equivalent of 3,923,167 bags has most likely been little changed over the period of mixed but overall sideways trade, which has since followed. One might think that the evidence of the extended net short sold position of the speculative sector of New York market might within the environment of the prevailing thin holiday trade, tend to restrain the bears within this market for trade today. But with charts tending to look more south than north for this volatile market, one might not suggest that there is too much in the way of upside potential for the market for the short term. However with the Brazil Real having posted a modest recovery and now trading at 3.85 to the U.S. dollar it shall dampen selling spirits out of Brazil, which might along with the lack of volume that comes with many players still off the field of play until post the New Year long weekend holiday, further assist to bring a degree of stability to the New York market for trade today. The holiday season has brought forth nothing in the way of fundamental news for the coffee markets, albeit that in terms of the prevailing El Nino that is seemingly having a marketed effect upon weather conditions within the U.S.A. and Europe is still a threatening factor for the longer term production levels in Colombia, Peru and Indonesia. Thus one might expect that post the New Year and the return to work of many holiday spirited industry players that the weather issues for these Pacific Rim countries shall start to come to the fore, with the probability of the reports being accompanied by lower 2016 crop forecasts. This phenomenon does however in the meantime and with its traditional influence upon increased rainfall for South East Brazil lessen any threat of partial drought conditions for the main Brazil arabica coffee districts for the first quarter of next year, which assists to support the many early forecasts for a significantly larger new Brazil crop next year. Thus for the present the fundamentals for the coffee markets are leaning more towards bearish rather than bullish sentiment and with the added influence of the bearish overall macro commodity index, the coffee markets continue to remain within the prevailing and relatively soft trading range. The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 49.98 usc/Lb., while this equates to a 41.95% 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 in more volume upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,465 bags yesterday; to register these stocks at 1,733,147 bags. There was meanwhile a larger in volume 3,540 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,413 bags. The Certified Robusta coffee stocks held against the London market were seen to decline by 1,667 bags on Monday 21st. December; to see these stocks registered at 3,312,000 bags. The commodity markets with the London markets closed for the holidays and the U.S.A. markets experiencing thin and lacklustre trade for the day provided little in the way of direction for trade yesterday, but with those markets that were trading mostly tending to take a softer track for the day. The Natural Gas market did however trade higher, but with the Oil, New York Sugar, Cocoa, Coffee, Copper, Gold, Silver and Platinum markets taking a softer track for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets lacked full participation and can only be reported in terms of the close on Thursday, when the index was 0.33% higher to see this Index registered at 377.75. The day starts with the U.S. Dollar taking a steady track in early trade and trading at 1.490 to Sterling and 1.097 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 35.75 per barrel. The London market remained on holiday yesterday and taking and extended Christmas long weekend holiday, while the New York market had a shortened day late start and attracting little in the way of volume once it opened. Trade was mixed for the day and with the market posting value either side of par, but to end the day on a softer note and having recovered 60.7% of the earlier losses of the day by the close. This close being related to very thin volumes does not provide much in the way of influence to market sentiment and while having been negative by the end of day, might well be countered by some degree of cautious support for early trade today and a degree of buoyancy against the prices set yesterday within the New York market yesterday and likewise for the London market prices set on Thursday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1485 – 8 MAR 119.15 – 0.55 |
