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 20.88% over the week of trade leading up to Tuesday 4th. August; to register a net short sold position of 17,983 Lots on the day. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.08%, to register a net long position of 27,511 Lots on the day.
Meanwhile the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 16.25% over the same week; to register a net short sold position of 24,300 Lots. This net short sold position which is the equivalent of 6,888,942 bags has most likely been reduced again, over the period mostly short covering 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 long position within the market by 22.49% over the week of trade leading up to Tuesday 4th. August; to register a net long of 5,472 Lots on the day. This net long that is the equivalent of 912,000 bags has most likely been little changed, over the period of mixed but overall positive trade that has since followed. The Brazil news and with repetitive reports of a significantly smaller percentage of bolder bean screen 17 plus coffees coming out of Brazil that would by nature impact on the overall weight of the new Brazil arabica coffee crop, is having some impact upon market sentiment. Especially so as it is accompanied by the evidence of higher price premiums being demanded within the internal market and the exporters, for the bolder bean arabica coffees, which tends to confirm the reality of this problem. These reports having been followed on Friday by the relatively pessimistic new crop forecast from the producer based National Coffee Council of Brazil, which had put an approximate 40 million bags number to this new crop. A number that would indicate a significant deficit crop of at least 13 million bags and while perhaps a questionable number in terms of the many other more positive reports that are presently in play, has seemingly inspired a degree of caution within the minds of the net short sold speculative sector of the New York arabica coffee market and inspired a bout of precautionary short covering support for the New York market in yesterday’s trade. A day that saw volume traded within the market the highest recorded for eighteen months and with the charts for the market tending to point north, to support the possibility of some added value still to come. This renewed buoyancy for the New York market that if it can hold might move the market into a more positive trading range and one which might gain some further support from more active industry buying in the coming higher volume winter months for the main northern hemisphere consumer markets, also brings some positive sentiment into play for the London robusta coffee market. Albeit that this latter market is still somewhat threatened by the prospects of rising volumes of past and new crop robusta coffee stocks coming to the market, from Vietnam. The arbitrage between the markets broadened yesterday to register this at 58.94 usc/Lb., while this equates to a 43.16% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 550 bags yesterday; to register these stocks at 2,096,043 bags. There was meanwhile a larger in number 6,050 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,230 bags. The commodity markets were somewhat buoyed yesterday by the combination of the positive economic data coming out of the U.S.A. and the suggestion that less positive economic data from China, shall inspire the Chinese authorities to come forth with an economic stimulus plan that shall finance and inspire rising demand for commodities. The Oil, Natural Gas, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, Cocoa and Orange Juice markets bucked the trend and had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.51% higher to see this Index registered at 405.29. The day starts with the U.S. Dollar steady and selling at 1.558 to Sterling and 1.097 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 48.80 per barrel. The London market started the day yesterday on a near to steady note, while the New York market started the day with early buoyancy and was soon joined by the London market in positive territory. Both markets took a relatively steady track into the afternoon trade until the Americans entered the field of play and with speculative short covering to buoy the New York market and with buy stops being triggered to accentuate the gains, which provided inspiration for more modest but follow through gains for the London market. The New York market continued on its upside track for the rest of the day and heading towards 4.5% gains for the day, which was followed by the steady recovery within the London market. The London market continued to end the day on a positive note and with 96.8% of the gains of the day intact, while the New York market ended the day on a strong note and with 93.4% of the earlier gains of the day intact. This overall positive close is somewhat inspirational and while there might be some corrective price fixation selling activity coming into play, one might think that the charts shall be supportive for an overall steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. SEP 1693 + 32 SEP 133.50 + 5.70 |
