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 338.05% over the week of trade leading up to Tuesday 15th. March; to register a net long position of 13,069 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.63%, to register a net long position of 33,067 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 141.5%, to register a net long position of 5,690 Lots. This net long position which is the equivalent of 1,613,090 bags has most likely been significantly increased, over the period of mixed but overall positive trade 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 decrease their net short sold position within the market by 22.97% over the week of trade leading up to Tuesday 15th. March; to register a net short sold position of 21,876 Lots on the day. This net short sold position that is the equivalent of 3,646,000 bags has most likely been further reduced, over the period of mixed but overall positive trade, which has since followed. The European Coffee Federation have reported that the declared coffee stocks held in the ports of Antwerp, Bremen, Hamburg, Genova, Le Havre and Trieste decreased by 158,750 bags or 1.34% during the month of January, to register the stocks at 11,701,467 bags as at the end of the month. These stocks fuel not only the Western European markets but also the Eastern European market, which total a demand of approximately 52 million bags, or approximately 1 million bags per week. However if one is to consider that the stocks do not include bulk container transit coffees, roaster on site inventories and private stocks held in non-declared warehouses and thus one might look to add at the very least 2 million bags and possibly as much as 3 million bags to the number above. This would indicate that the overall coffee stocks within Europe as at the end of October would have been close to 14 million bags and are therefore sufficient in number, to fuel a very safe in excess of 14 weeks of roasting demand. A factor one would think shall continue to inspire European industries to remain relatively complacent towards the market in general and to result in slow to steady buying activity, for the near term. The May on May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 64.74 usc/Lb., while this equates to a 49.21% 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 increase by 1,222 bags on Friday; to register these stocks at 1,441,223 bags. There was meanwhile a larger in volume 6,825 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,419 bags. The commodity markets while gaining some degree of support from a marginally softer U.S. dollar remain cautious for the present, as aside from the steady growth within the U.S.A., the global growth prospects continue to look lacklustre. Thus while trade was mixed for the day, the overall macro commodity index reflected this and tended marginally softer for the day. The Oil, Sugar, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Silver markets had a day of buoyancy, while the Natural Gas, Cocoa, Coffee and Gold markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.20% lower; to see this Index registered at 391.21. The day starts with a steady U.S. Dollar trading at 1.439 to Sterling and 1.125 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 40.10 per barrel. The London and New York markets opened the day yesterday on a predictably softer note following the strong close on Friday, but with the well discounted London market soon posting a recovery into modest positive territory, while the New York market continued on its softer opening track. This remained the track into the afternoon trade and with the New York market coming under further pressure as the afternoon progressed to see the London market moving back towards par, but with the New York market coming off its lows the London market showed renewed buoyancy. It was however a short lived recovery for the London market and while the New York market took something of a sideways softer track for the rest of the day, the London market tailed off and moved back into modest negative territory to end off the day. The London market ended the day on a modestly softer note and with 56.2% of the losses of the day intact, while the New York market ended the day on a softer note and with 75.3% of the earlier losses of the day intact. This close as against the clear evidence as to how long the funds and speculative sectors have bought into the New York market does little to inspire confidence and one might expect to sell little better than a cautious steady to marginally softer start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1438 – 9 |
