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 85.26% over the week of trade leading up to Tuesday 1st. March; to register a net short sold position of 19,363 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.11%, to register a net long position of 32,716 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 62.28%, to register a net short sold position of 27,026 Lots. This net short sold position which is the equivalent of 7,661,751 bags has most likely been significantly decreased again, over the period of short covering buying that 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 13.34% over the week of trade leading up to Tuesday 1st. March; to register a net short sold position of 27,514 Lots on the day. This net short sold position that is the equivalent of 4,585,667 bags has most likely been slightly reduced, over the period of mixed but overall positive trade, which has since followed. The Coffee Federation in Colombia have reported that the country’s coffee production for the month of February was 67,000 bags or 6.51% higher than the same month in the previous year, at a total of 1,096,000 bags. This improved performance has contributed to the countries cumulative production for the first five months of this new October 2015 to September 2016 coffee year to being 957,000 bags or 17.66% higher than the same period in the previous coffee year, at a total of 6,376,000 bags. In terms of exports, the Coffee Federation in Colombia have reported that the country’s coffee exports for the month of February were 33,000 bags or 3.08% higher than the same month in the previous year, at a total of 1,105,000 bags. This improved performance has contributed to the countries cumulative exports for the first five months of this new October 2015 to September 2016 coffee year to being 495,000 bags or 9.55% higher than the same period in the previous coffee year, at a total of 5,676,000 bags. Thus in terms of the new coffee year so far, we see Colombia building upon its impressive performance of the previous coffee year. However with the drier weather that is being experienced with the prevailing El Nino phenomenon that is presently in play and its negative effect upon the flowering for the next mid-year Mitaca crop, one might suggest that Colombian coffee production for this year new coffee year might struggle to match the impressive production level of the previous coffee year. But nevertheless a crop that combined with increased fine washed arabica coffee supply due from Central America and Peru, which shall be sufficient to satisfy consumer market demand for these quality fine washed arabica coffees, for the foreseeable future. The May on May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 57.67 usc/Lb., while this equates to a 47.70% 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 903 bags yesterday; to register these stocks at 1,521,103 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 9,550 bags. The commodity markets seemingly shrugged off the negative news of declining export activity out of China this year and with the U.S. dollar losing some weight, the overall macro commodity index managed to retain some buoyancy for the day. The Oil, Natural Gas, Copper and Soybean markets had a day of buoyancy and the Cocoa, Coffee, Cotton, Wheat and Silver markets had a steady day, while the Sugar, Orange Juice, Corn and Gold markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.58% higher; to see this Index registered at 381.00. The day starts with the U.S. Dollar hesitant in early trade and trading at 1.424 to Sterling and 1.102 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 39.30 per barrel. The London market started the day yesterday with modest buoyancy but with the New York market unable to sustain carry through buoyancy following the rally on Friday and starting the day on a modestly softer note, the London market soon fell back to par and carried on for the morning trading either side of par. The markets maintained this stance into the afternoon and with the New York market remaining south of par, while the London market hovered mostly around par, but with the New York market finally making a full recovery and moving north of par and the London market continuing with modest buoyancy. But it was a day of mixed fortunes and finally the markets staggered towards a relatively steady close and with the London market to the north of par and retaining 10% of its earlier losses of the day, while the New York market ended the day to the south of par, but having recovered 94.6% of the earlier losses of the day. This close provides no indication of direction and one might expect to see a hesitantly near to steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1364 + 1 MAR 118.65 – 0.15 |
