Coffee Market Report
It is proving difficult for many to assess their strategy in terms of speculative investment into the New York arabica coffee exchange, as the last Commitment of Traders data from this market were the figures for the 18th. December. Since then and following the U.S.A. Shutdown of the Federal Government, the U.S. Commodity Futures Trading Commission has not been publishing the figures, leaving the market players to have to guess the speculative and fund status within this volatile market.
There are now only twelve trading days to the fore for the Vietnamese coffee industry, prior to the country closing down for the week-long Tet New Year holidays, which shall start on the 4th. February for the eve of the New Year on the 5th. February, which shall bring in the new Year of the Dog. But while historically farmers used to become aggressive sellers of new crop coffee stocks ahead of the festivities so as to finance the celebrations, in recent years and with income from alternative crops, this has not been the case in the recent years and one might think that it shall rather be business as usual over the next two weeks.
Thus, one would speculate that the pre-Tet holiday trade shall not be a factor that shall be threatening for the short term, to the fortunes of the London robusta coffee market.
Meanwhile the Vietnam coffee industry is already planning for the forthcoming Buon Ma Thuot Coffee Festival in the Central Highlands province of Dak Lak, which shall take place over the 9th. to 16th. March. This festival being held within Vietnam’s largest coffee producing province, aimed to not only address commercial issues for the industry in terms of the Investment Promotion Conferenced and Coffee Exhibition, but also a street festival to bring the coffee community together.
The March to March contracts arbitrage between the London and New York markets broadened yesterday, to register this at 32.59 usc/Lb., while this equates to 31.83% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,429 bags yesterday; to register these stocks at 2,472,105 bags. There was meanwhile a larger in number 7,865 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,939 bags.
The commodity markets had a mixed but overall more positive day of trade yesterday, to see the overall macro commodity index on a modest positive track for the day. The Oil, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean and Gold markets ended the day on a positive note and the Silver market steady for the day, while the Natural Gas and Orange Juice markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.42% higher; to see this index registered at 402.8. The day starts with the U.S. Dollar steady and trading at 1.287 to Sterling, at 1.139 to the Euro and with the dollar buying 3.736 Brazilian Real.
The London and New York markets started the day yesterday on a modestly softer note, but with the New York market soon bouncing back to trade around par and with the markets taking this mixed stance, into the early afternoon trade. As the afternoon progressed the New York market and in line with the positive nature of the overall macro commodity index moved up into positive territory and with the London market moving back up to trade close to par, which set the markets on a positive track. To see both markets move well into positive territory, for the late in the trade.
The London market ended the day on a positive note and with 75% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 64.7% of the earlier gains of the day intact. This overall positive close was not accompanied by any fundamental support news and therefore, one might expect that there could be a degree of caution due for early trade today. To set the markets for something of a hesitant near to steady start for the day, against the prices set yesterday, as follows.
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JAN 1519 + 13 MAR 102.40 + 1.10
MAR 1539 + 12 MAY 105.55 + 1.00
MAY 1560 + 8 JUL 108.25 + 0.90
JUL 1579 + 8 SEP 111.05 + 0.80
SEP 1597 + 8 DEC 114.95 + 0.80
NOV 1616 + 8 MAR 118.75 + 0.80
JAN 1634 + 8 MAY 121.15 + 0.75
MAR 1654 + 8 JUL 123.30 + 0.75
MAY 1674 + 8 SEP 125.40 + 0.80
JUL 1690 + 8 DEC 128.40 + 0.80
