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 long position within the market by 1.29% over the week of trade leading up to Tuesday 30th. August; to register a net long position of 32,161 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 9.39%, to register a net long position of 39,471 Lots on the day.
Over the same week the Non Commercial Speculative sector of this market decreased their long position within the market by 0.06%, to register net long position of 27,816 Lots. This net long position which is the equivalent of 7,885,713 bags is most likely to have been increased again, following the period of mixed but overall more positive trade that has since followed and likewise, that of the Managed Money Fund sector within this market.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non Commercial sector of this market increase their net long position within this market by 11.18% during the week of trade leading up to Tuesday 30th. August; to register a long position of 26,665 Lots. This net long position which is the equivalent of 4,444,167 bags has most likely been since increased, following the period of mixed but overall more positive trade that has since followed.
The Coffee Federation in Colombia have reported that the country’s coffee production for the month of August was 75,000 bags or 5.93% lower than the same month in the previous year, at a total of 1,189,000 bags. This performance does however follow many months of improved production and has contributed to the countries cumulative production for the first eleven months of this new October 2015 to September 2016 coffee year to being 700,000 bags or 5.7% higher than the same period in the previous coffee year, at a total of 12,975,000 bags.
In terms of exports, the Coffee Federation in Colombia have reported that the country’s coffee exports for the month of August were 159,000 bags or 14.52% higher than the same month in the previous year, at a total of 1,254,000 bags. This improved performance contributes to the countries cumulative exports for the first eleven months of the present October 2015 to September 2016 coffee year to being 58,000 bags or 0.52% higher than the same period in the previous coffee year, at a total of 11,251,000 bags.
These figures with Colombian coffee production tailing off over the past couple of months, does confirm the expectations that the overly dry conditions that came with the El Nino phenomenon within the Pacific Ocean for the last quarter of last year and the first quarter of this year, has impacted negatively within many coffee districts in Colombia and the output from the countries Mitaca coffee crop. While the flat export performance for the coffee year so far is not related to dip in production for the past couple of months, but more so to the disruptive influences of the forty-five days of trucker’s strike, which did not allow for new coffees to make their way to the export ports during the month of July.
The strike is however over now history in Colombia and the exporters are in the process of catch up exports, which is likely to see Colombia once again reporting coffee exports of in excess of 1.2 million bags for the month of September. Just in time exports one might comment, in terms of the main northern hemisphere roasters needing to build up stocks of these fine washed arabica coffees in time for the higher volume winter roasting season.
The November to December contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 66.26 usc/Lb., while this equates to a 43.76% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry.
The Certified washed Arabica coffee stocks held against the New York exchange with the exchange closed for the day were unchanged since the decrease by 4,480 bags on Friday; to register these stocks at 1,276,364 bags. Likewise, there was no change since the smaller in volume 333 bags increase on Friday to the number of bags pending grading for this exchange; to register these pending grading stocks at 8,010 bags.
The commodity markets with a host of U.S.A. markets closed for the day for the Labour Day long weekend holiday yesterday lacked concentrated direction but nevertheless those markets that were open, did nevertheless have an overall positive day and the thinner overall commodity index showing buoyancy for the day. The Oil, Sugar, London robusta Coffee, Copper, Gold and Silver markets had a day of buoyancy and the Cocoa market was near to steady for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets remains 0.37% higher; to see this Index registered at 414.72. The day starts with the U.S. dollar steady in early trade and trading at 1.332 to Sterling and 1.115 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and trading at 46.95 per barrel.
The London market traded solo yesterday and started the day on relatively steady note to then build upon this platform and to take a positive track during the afternoon trade, but with light volumes of producer selling coming in at the highs and to limit the gains for the day. The market nevertheless ended the day on a positive note and with 75% of the earlier gains of the day intact, which is likely to inspire a degree of confidence and for a follow through steady start for the markets for early trade today against the close on Friday in New York and in London yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
SEP 1855 + 14 SEP 150.10 unch
NOV 1877 + 12 DEC 151.40 unch
JAN 1898 + 13 MAR 154.50 unch
MAR 1913 + 12 MAY 156.25 – 0.05
MAY 1926 + 12 JUL 157.75 – 0.10
JUL 1937 + 12 SEP 159.05 – 0.15
SEP 1949 + 12 DEC 161.05 – 0.15
NOV 1962 + 12 MAR 162.95 – 0.15
JAN 1971 + 12 MAY 164.05 – 0.10
MAR 1978 + 12 JUL 165.10 – 0.10
