Coffee Market Report
| The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net short sold position within the market by 306.84% over the week of trade leading up to Tuesday 25th. August; to register a net short sold position of 4,577 Lots on the day. This net long that is the equivalent of 762,833 bags has most likely been little changed, over the period of mixed but overall sideways trade that has since followed.
With the month of August passed the Government trade authorities within Indonesia’s main robusta producing island of Sumatra have reported that the islands robusta coffee exports for the month of August were 314,316 bags or 70.28% higher than the same month last year, at a total of 761,534 bags. This improved performance and following the rising robusta export volumes for the previous six months contributes to the cumulative robusta coffee exports from Sumatra for the first eleven months of the present October 2014 to September 2015 coffee year to being 1,109,492 bags or 35.75% higher than the same period in the previous coffee year, at a total of 4,213,261 bags. These latest figures tend to bring into question the latest report from the Association of Indonesian Coffee Exporters, who had sharply reduced by 16.7% to 22.9% their coffee crop forecasts for this year, due to the negative effects of El Nino. Especially so as the surging export volumes of robusta coffees from Sumatra are despite the tendency towards internal market price resistance, which came with the softening prices of the related London robusta coffee market. Rather all indications are that this improved performance in export volumes would support the general opinion of the international trade and industry players in Indonesia, that the production is indeed more in line with initial expectations for a good crop. As these improved volumes of exports are despite the evidence of rising domestic market demand, which would have also impacted upon the availability of new crop coffees for export. Following the example of the North American roasters the prominent European roaster Tchibo have announce price cuts for their main stream coffees, as they fight for market share within the highly competitive European retail coffee markets. These price cuts are despite the recent weakness of the Euro to the U.S. dollar, which does highlight the relatively flat nature of the main consumer coffee markets for the present, while the cuts limit the upside buying potential and the lack of support for the markets, from the consumer market industries. The arbitrage between the markets broadened yesterday to register this at 51.23 usc/Lb., while this equates to a 41.21% 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 increase by 3,482 bags yesterday; to register these stocks at 2,086,948 bags. There was meanwhile a larger in volume 8,468 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,055 bags. The commodity markets were mixed yesterday and with the London markets off the field of play, but with the markets nevertheless with Oil in the lead taking a generally positive track for the day and likewise the overall macro commodity index. The Oil, Cotton, Soybean and Platinum markets had a day of buoyancy and the Natural Gas, New York arabica Coffee, Wheat and Silver markets had a steady day, while the Copper, Orange Juice, Corn and Gold markets having a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.93% higher to see this Index registered at 399.78. The day starts with the U.S. Dollar steady and selling at 1.539 to Sterling and 1.128 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 51.10 per barrel. The London market was closed yesterday and the New York started the day late and with thin trade, but showing some early buoyancy. This was however short lived and with the weaker Brazil Real coming into play and seemingly attracting some light price fixation selling interest from the Brazil, the market started to take a negative turn. But with producer selling light and some degree of uncertainty, the market did manage a recovery and a hesitant move back to par, as the afternoon progressed. The was little further excitement for the day and the New York market continued to end the day on a steady note and the positive side of par, but having shed 91.1% of the earlier gains of the day by the close. This close is unlikely to do much to inspire confidence and one might expect to see with the London market returning to the field of play today, both markets taking a hesitant and cautious steady start for early trade today against the prices set in London on Friday and in New York yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. SEP 1581 – 26 SEP 120.55 + 0.10 |
