Coffee Market Report
12th. January, 2016.
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 46.63% over the week of trade leading up to Tuesday 5th. January; to register a net short sold position of 8,101 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.96%, to register a net long position of 26,968 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 34.98%, to register a net short position of 13,365 Lots. This net short sold position is the equivalent of 3,788,918 bags on the day.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net short sold position within the market by 6.28% over the week of trade leading up to Tuesday 5th January; to register a net short sold position of 24,863 Lots on the day. This net short sold position that is the equivalent of 4,143,833 bags has most likely been little changed over the period of mixed but overall sideways trade, which has since followed.
The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 48.95 usc/Lb., while this equates to a 42.77% 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 4,240 bags on Friday; to register these stocks at 1,710,579 bags. There was a similar volume of 4,172 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,175 bags.
It was a softer day for the commodity markets overall yesterday, as negative sentiment weighed in from the Chinese markets and sent shudders across the commodity sector. The firmer US Dollar against other major currencies contributed toward the negative mood, while developing the developing economy sector currencies posted a lower day. It was a softer day for the Oil markets, Sugar, Cocoa, Coffee, Copper, Corn, Orange Juice, Wheat, Soybean markets, whereas the traditional safe haven Gold markets registered a firmer day, the metal lost some shine toward the latter half of the session and it was a softer finish for Gold, Silver, Platinum and Palladium markets. The Cotton market had a steady to mildly positive day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.98% lower to see this Index registered at 364.39. The day starts with the U.S. Dollar steady in early trade and trading at 1.452 to Sterling and 1.087 to the Euro, while North Sea Oil is softer in early trade and is selling at 29.47 per barrel.
The London and New York coffee markets started the day on a marginally softer note and with both markets continuing on a negative track toward midday. The overall negative sentiment within the commodity sector was assisted to a degree by the steady decline in the Brazil Real value against the US Dollar which touched upon 4.0662 during the day and this brought little relief to either of the coffee markets. After a relatively modest and mildly negative session through the morning and with speculative negative influence applying pressure to the day, the softer trend had set by the time that the Americas’ came to the floor to see increased seller activity toward the latter half of the session and stops triggered along the way. There was a degree of buying activity seen to return to the floor toward the tail end of the session but this was again met with fresh sellers, with a recovery posted near to the close of the day, both markets finished the day just above the lows of the day in both markets. This relatively unsteady close is unlikely to inspire anything better than a near to steady start for early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JAN 1403 – 37 MAR 114.45 – 4.55
MAR 1444 – 41 MAY 116.80 – 4.40
MAY 1473 – 40 JUL 118.80 – 4.35
JUL 1502 – 39 SEP 120.70 – 4.20
SEP 1528 – 37 DEC 123.30 – 3.95
NOV 1551 – 36 MAR 125.75 – 3.95
JAN 1570 – 35 MAY 127.15 – 3.95
MAR 1589 – 35 JUL 128.45 – 4.00
MAY 1611 – 35 SEP 129.60 – 4.05
JUL 1636 – 35 DEC 131.15 – 4.05
