Coffee Market Report
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net long position by 12.86% within the market over the week of trade leading to Tuesday 15th. October 2024: to register a new long position of 40,656 lots, which is the equivalent of 11,525,796 bags. This net long position has most likely been little changed further following the period of overall sideways trade that has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector decrease their net long position by 8.33% within the market over the week of trade leading to Tuesday 15th. October 2024: to register a new net long position of 29,459 Lots which is the equivalent of 4,909,833 bags. This net long position has most likely been decreased further following the period of mixed but overall softer trade that has since followed.
Hurricane Oscar has developed in the Caribbean over the weekend, making landfall along the northern coast of Cuba bringing with it strong winds and heavy rains. The hurricane is expected to weaken over the next few hours as it is tracking north of Cuba across the central Bahamas. The Atlantic hurricane season traditionally begins in June and ends in November, with most activity occurring between mid-August and mid-October. Hurricane activity tends to peak in mid-September, according to the National Oceanic and Atmospheric Administration of the USA.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 12,190 bags on Friday, to register these stocks at 849,709 bags, with 98.02% of these certified stocks held in Europe at a total of 832,935 and the remaining 1.98% being held in the USA at a total 16,774 Bags. Of this, a total 397,662 bags, or 46.80% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.76% of these certified coffees, from Nicaragua. The pending grading stocks were seen to increase by 45,928 bags, to register 89,349 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets widened on Friday, to register this at 44.02 Usc/Lb. This equates to 17.10% price discount for the London robusta coffee.
It was firmer day on the commodity markets on Friday, a firmer day for the ‘safe haven’ gold markets that touched new record highs during the session. Investor attention is on the potential for an easing in the US Federal Bank monetary policy, a second consecutive interest rate cut to come from the USA next month. The Peoples Bank of China lowered interest rates by 25 basis points, as part of its economic stimulus package with further rate cuts likely before the end of the year. The Coffee, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a firm note, while the Cocoa, Corn, Soybean and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.304 Sterling, at 1.086 the Euro and with the US Dollar buying 5.689 Brazil Real.
The New York and London markets started the day on Friday trading to the north of par on firmer notes respectively. The markets were seen to trade to either side of par for the remainder of the early morning session, before gaining momentum to trend in a firmer direction gained for the remainder of the morning session, albeit in modest volumes of trade. This early support continued through the late-morning session to see both the New York and London markets set new highs for the day’s session. This support during the morning session was reversed when the markets encountered resistance near to the highs of the day and both markets dropped back from the mid-morning highs to trend towards par. As the afternoon progressed the markets continued to trade within a range. The London market dropped back towards par before finding support day to settle on a firmer note with less than half of the earlier gains of the day intact, while the New York market was also seen to drop back from the earlier highs, to settle on a firmer note at the close with half of the earlier gains of the day intact.
The London market ended the day on a positive note with 36.17% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 54.43% of the earlier gains of the day intact. This firmer close for the markets, albeit that both the New York and London markets fell back from the highs of the day during the session to maintain some of the earlier gains of the day. There are five trading days to go before first notice day on the prompt month in London, one might think that the markets are due for a follow through softer start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 4702 + 17 DEC 257.30 + 2.15
JAN 4615 + 17 MAR 256.00 + 2.15
MAR 4512 + 20 MAY 254.05 + 2.05
MAY 4430 + 26 JUL 250.80 + 1.90
JUL 4340 + 22 SEP 247.05 + 1.90
SEP 4264 + 22 DEC 241.00 + 1.75
NOV 4186 + 21 MAR 235.80 + 1.85
JAN 4106 + 21 MAY 231.05 + 1.85
