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 26.33% over the week of trade leading up to Tuesday 23rd. February; to register a net short sold position of 10,452 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.52%, to register a net long position of 33,082 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 18.19%, to register a net short position of 16,654 Lots. This net short sold position which is the equivalent of 4,721,335 bags has most likely been little once again increased, following the period of mixed but overall negative trade which 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 increase their net short sold position within the market by 20.71% over the week of trade leading up to Tuesday 23rd. February; to register a net short sold position of 24,276 Lots on the day. This net short sold position that is the equivalent of 4,046,000 bags has most likely been little changed, over the period of mixed but following yesterday’s positive correction sideways trade, which has since followed. With the month of February passed the government trade data from Sumatra the leading coffee producing island within Indonesia have reported that the islands robusta coffee exports for the month were 151,715 bags or 47.91% lower than the same month last year, at a total of 164,935 bags. This dip in exports has contributed to the islands cumulative robusta coffee exports for the first five months of the present October 2015 to September 2016 coffee year to be 516,485 bags or 30.42% lower than the same period in the previous coffee year, at a total of 1,181,149 bags. This dip in exports is more related to the prevailing price resistance to the relatively soft nature of the reference prices of the London robusta coffee market, than it is to any shortage of robusta coffees within the island for the present. However with the latest El Nino having been in play and likely to carry on through to the early in the second quarter of this year and ahead of the start of the harvest of the next new crop, one might expect that there might well be a dip in production due for Sumatra. Thus following the impressive recovery which saw Sumatra register a 1,106,841 bags or 30.84% increase in robusta coffee exports for the just completed October 2014 to September 2015 coffee year to total 4,696,081 bags, one might expect to see an excess of a 2 million bags dip in Sumatran robusta coffee exports due by the end of the present October 2015 to September 2016 coffee year. The prominent Brazilian exporter Comexim has forecast that the forthcoming new Brazil crop shall be 13% higher than their assessment for the previous 2015 crop, at a total of 56.25 million bags. This crop to be made up by 44.35 million bags of arabica coffees and 11.9 million bags of conilon robusta coffees. They do however further forecast that by the time this crop is starting to impact in the middle of the year, that the carryover coffee stocks from the past year shall have been exhausted and that therefore, there shall with little in the way of support stocks be only a very modest surplus Brazil supply through to the next 2017 crop. This forecast would indicate that there shall be less selling aggression due out of Brazil, for the second half of this year, which could be supportive for market buoyancy later in the year. The May on May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 50.96 usc/Lb., while this equates to a 44.29% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, with the good discount most likely due to remain in place for the foreseeable future, in line with steady robusta shipments out of Vietnam. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,122 bags yesterday; to register these stocks at 1,546,141 bags. There was meanwhile a smaller in volume 320 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 4,160 bags. The commodity markets were mixed but with many markets on a more positive track for trade yesterday, with the overall macro commodity index showing buoyancy through the day. The Oil, Sugar, Cocoa, London robusta Coffee, Gold and Silver markets had a day of buoyancy and the New York arabica Coffee, Copper and Wheat markets were near to steady for the day, while the Natural Gas, Cotton, Orange Juice, Corn and Soybean markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.67% higher; to see this Index registered at 368.84. The day starts with the U.S. Dollar steady in early trade and trading at 1.393 to Sterling and 1.088 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 36.60 per barrel. The London and New York markets started the day yesterday on a modestly softer track and maintained this sideways negative track into the afternoon trade, but as the afternoon progressed there was some degree of support coming to the fore for both markets and a move back into positive territory. However while the London market managed to build upon its recovery and add to its gains later in the day, the New York market faltered and fell back to end the day marginally below par. The London market ended the day on a positive note and with 88.7% of the earlier gains of the day intact, while the New York market ended the day on a near to steady note and having recovered 86.4% of the earlier losses of the day. This mixed close provides conflicting signals as do the charts, but one might expect to see some producer selling due to impact upon the London market but perhaps some cautious buoyancy for the New York market for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1375 + 49 MAR 112.65 – 0.35 |
