Coffee Market Report
| The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market decrease their net long position within the market by 2.33% during the week of trade leading up to Tuesday 29th. March; to register a net long position of 19,068 Lots. This net long position which is the equivalent of 5,405,693 bags has most likely been little changed, following the period of mixed but mostly sideways trade, which has since followed.
The National Coffee Institute of Honduras have reported that the countries coffee exports for the month of March were 22,596 bags or 2.88% lower than the same month last year, at a total of 762,333 bags. This small did in exports does however follow some more positive months during the present October 2015 to September 2016 coffee year and the countries cumulative coffee exports for the first six months of this coffee year are still 4.3% higher than the same period in the previous coffee year, at a total of 2.47 million bags. While in the meantime the forecasts remain for good volumes of new crop exports to follow, with a 10% higher target than that of the previous coffee year, to foresee exports for the present coffee year of approximately 5,52 million bags. The National Coffee Institute of Costa Rica have reported that the countries coffee exports for the month of March were 10,480 bags or 6.35% higher than the same month last year, at a total of 175,447 bags. This improved export performance does however follow a slow start for this present October 2015 to September 2016 coffee year and the cumulative exports for the first six months of the present coffee year are still 1.6% lower than the same period in the previous coffee year, at a total of 488,132 bags. These exports indicating that the country remains on target for steady exports for the present coffee year to slightly exceed exports of the previous coffee year, with many foreseeing exports for the present coffee year to get close to 1.2 million bags. The preliminary coffee exports for the month of March are recorded to have been 85,117 bags or 2.98% lower than the same month last year, at a total of 2,775,268 bags. This being a relatively modest decline but not an unexpected decline, with the lower volumes of conilon robusta coffee exports that are being experienced ahead of a smaller new conilon robusta crop and likewise, the slowing of arabica coffee exports with the stocks now much depleted, ahead of the impact during the second half of the year of the forecasted significantly larger new Brazil arabica coffee crop. While Vietnam awaits the start of the new end April to October spring and summer rain season for the main coffee districts within the country, there are constant reports of internal market concerns that the rains might come late and have some negative impact upon the fortunes of the next crop. This is assisting to inspire farmers and internal traders to remain price resistant with their sales of new crop robusta coffee stocks, which continues to maintain the price premiums relative to the London market, that exporters are obliged to demand. The July on July contracts arbitrage between the London and New York markets broadened on Friday, to register this at 60.45 usc/Lb., while this equates to a 46.73% 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 10,307 on Friday; to register these stocks at 1,420,499 bags. There was meanwhile a smaller in volume 5,272 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,771 bags. The Certified Robusta coffee stocks held against the London market are seen to have declined by 395,500 bags or 12.01% over the first three months of this year, to register these stocks at 2,897,500 bags at the end of the month of March. These stocks with the prevailing inflated export price differentials that robusta coffee producers continue to attract are likely to continue to steadily decline, as the year progresses. The commodity markets and with the U.S. dollar stabilising for the day had an overall soft end to last week, which saw the overall macro commodity index taking a softer track for the day. The Cotton and Soybean markets nevertheless had a day of buoyancy and the Corn and New York arabica Coffee markets were steady, while the Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Copper, Orange Juice, Wheat, Gold and Silver markets had as softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.15% lower; to see this Index registered at 383.36. The day starts with a steady U.S. Dollar trading at 1.421 to Sterling and 1.138 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 36.10 per barrel. The London and New York markets started the day on Friday on a near to steady note, but with both markets coming under pressure and taking a negative track into the afternoon trade. The London market continued to remain under pressure through the afternoon, while the New York market bounced off the lows and headed back up to trade briefly in positive territory before faltering to head back below par at the end of the day. The London market ended the day on a negative note and with 71.4% of the earlier losses of the day intact, while the New York market ended the day on a near to steady note and having recovered 93.3% of the earlier losses of the day by the close. This close while assisting to support a negative technical picture did however show that there is some resistance at the lows for the volatile New York market and one might even expect to see a hesitantly steady to perhaps even buoyant start for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1485 – 16 MAY 127.25 – 0.20 |
