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 increase their net short sold position within the market by 46.67% over the week of trade leading up to Tuesday 22nd. December; to register a net short sold position of 16,734 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.56%, to register a net long position of 26,630 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 35.81%, to register a net short position of 21,545 Lots. This net short sold position which is the equivalent of 6,107,912 bags has most likely been slightly reduced, following the mixed and sideways trade that experienced a short covering correction yesterday. The larger new Vietnam robusta coffee crop is dropping off from its peak harvest with an estimated 70% of the crop already harvested, with these coffees joining the significant carryover stocks from the past crop harvest. But one would think in terms of the exports over this last quarter of the year, that a good percentage of past crop coffee stocks might have been liquidated. There is nevertheless with the new robusta coffee crop that many are forecasting to be close to 28 million bags and these coffees over and above the approximate 1.3 million bags of new crop arabica coffees due, no doubt considerable stocks now building up within the country. The issue is though and while internal market trade is presently quiet in line with the holiday season that prevails within the main coffee consumer markets, the question of where the prices shall be for the Vietnam coffee farmers in the New Year. Their costs with their highly efficient good yields are relatively low and so far even with the presently soft international prices, most farmers can still foresee profits from the new crop, but the margins are thinning and one would think that farmers shall be obliged to sell higher percentages of the new crop to cover immediate harvest and post-harvest costs, which might bring some more aggressive selling into play in the coming weeks. The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 52.64 usc/Lb., while this equates to a 43.34% 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 increase by 785 bags yesterday; to register these stocks at 1,733,932 bags. There was meanwhile a larger in volume 2,625 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,788 bags. The Certified Robusta coffee stocks held against the London market were seen to decline by 833 bags on Wednesday 23rd. December; to see these stocks registered at 3,300,667 bags. The commodity markets had a slow and softer start yesterday following the extended long weekend for the London markets, but with most markets following the positive stance taken within the majority of the equity markets and moving back into a positive track and with overall macro commodity index taking a positive stance and assisting to inspire confidence within many of the markets. The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Copper, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy and the Gold market was near to steady, while the London robusta Coffee, Cotton and Orange Juice markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.11% higher to see this Index registered at 380.55. The day starts with the U.S. Dollar taking a steady track in early trade and trading at 1.483 to Sterling and 1.093 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 36.45 per barrel. The London market returned from the long weekend yesterday, to register some modest early losses, which was followed by a similar modest dip in value on the opening in the New York market. The New York market did however soon start to stabilise and within an environment of thin and lacklustre trade, see the market move back to par. This was however a short lived correction and the New York market soon slipped back and to see both markets taking a thinly traded modest negative track, into the afternoon’s trade. The London market struggled through the day and remained mostly in negative territory, but the New York market and with both producer and consumer industry activity muted gained support from the fund and speculative sectors of the market and with short covering buying activity in play, followed the upside trend of the macro commodity index for later in the day’s trade. The London market continued to end the day on a softer note and with 57.1% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 70.8% of the earlier gains of the day intact. This positive end to the day for the New York market that had seen the market hit two and half week highs during the day and albeit technically rather than fundamentally driven and related to thin volumes, might well inspire a degree of cautious confidence and assist the markets to attract some follow through modest buoyancy for early trade today, against the prices set yesterday, as follows. LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1477 – 8 MAR 121.45 + 2.30 |
