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 239 Lots over the week of trade leading up to Tuesday 1st September; to register a net short sold position of 4,816 Lots on the day. This net short position is the equivalent of 802,666 bags has most likely been only slightly extended, over the period of mixed but overall sideways trade that has since followed.

The arbitrage between the markets widened yesterday to register this at 47.43 usc/Lb., while this equates to a 39.81% 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 remained unchanged, with New York on holiday yesterday; to register these stocks at 2,076,182 bags. There was meanwhile a larger in volume 4,125 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,103 bags.

The leading U.S.A. markets were closed yesterday and sentiment in other markets mixed, with the latest round of data released from China received as bearish and speculation continues regarding the prospects of a US Federal Reserve interest rate hike, to sway the markets. The US Dollar gained some ground yesterday and it was a softer day for Crude Oil, Gold, Silver, Platinum and a better day for Sugar, Copper, Cocoa and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.61% lower to see this Index registered at 393.91 on Friday. The day starts with the U.S. Dollar at 1.534 to Sterling and 1.117 to the Euro, while North Sea Oil is tending easier in early trade and is selling at 45.09 per barrel.

It was a relatively quiet day for the London Robusta market, which traded alone with New York closed for the Labour Day holiday yesterday. In the absence of marked fresh fundamental news and lacking guidance in the way of speculative sentiment from its’ traditionally higher in volume cousin, removed for the day, the London market opened mildly softer and in muted volume. This set the tone for the rest of the day, which was a very modest day in volume terms and in negative territory, although the levels on the day held steady within a narrow range. The week starts off tomorrow for the New York arabica market, which after the steady to slightly softer close on Friday, might see a near to steady start for early trade today, against the prices set in London yesterday and New York on Friday, as follows:

LONDON ROBUSTA US$/MT       NEW YORK ARABICA USc/Lb.
                                                          Close 04/09/2015

SEP 1575 – 14                                   SEP    115.85 – 0.35
NOV 1581 – 18                                 DEC   119.15 – 0.40
JAN 1595 – 17                                  MAR  122.60 – 0.45
MAR 1613 – 18                                MAY 124.90 – 0.40
MAY 1634 – 16                               JUL    127.05 – 0.35
JUL 1654 – 14                                  SEP   129.00 – 0.30
SEP 1674 – 14                                 DEC   131.85 – 0.20
NOV 1695 – 14                               MAR 134.65 – 0.10
JAN 1715 – 16                                MAY 136.60 + 0.05
MAR 1737 – 16                               JUL  138.45 + 0.10