Coffee Market Report
4th. February, 2019.
The delayed Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 4.94% over the week of trade leading up to Monday 24th. December; to register a new net short sold position of 63,908 Lots. This net short-sold position which is the equivalent of 18,117,635 bags has most likely been little changed to perhaps marginally decreased, following the mixed but overall more buoyant but generally sideways trade which has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within the market by 4.29% during the week of trade leading up to Tuesday 29th. January; to register a short-sold position of 26,806 Lots on the day. This net short position which is the equivalent of 4,467,667 bags has most likely been little changed to perhaps marginally decreased further, following the period of mixed but overall more positive trade that has since followed.
With the month of January passed, the Brazil Trade Ministry has reported that the countries coffee exports for the month were 412,515 bags or 13.61% higher than the same month last year, at a total of 3,030,591 bags. But one would guess that this rise in monthly coffee exports for the first month of the year is heavily influenced by the rising volumes of conillon robusta coffee exports, following last years’ much improved conillon crop, than to a rising consumer market demand for Brazil arabica coffees.
The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 35.54 usc/Lb., while this equates to 33.28% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,110 bags on Friday; to register these stocks at 2,485,252 bags. There was meanwhile a larger in number 2,542 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 17,399 bags.
The commodity markets were mixed in trade on Friday, to see the overall macro commodity index taking something of a sideways track for the day. The Oil, Orange Juice, Wheat, Corn and Soybean markets ended the day on a positive note and the Cocoa and London robusta Coffee markets were steady for the day, while the Natural Gas, Sugar, New York arabica Coffee, Cotton, Copper, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.19% higher; to see this index registered at 402.98. The day starts with the U.S. Dollar steady and trading at 1.307 to Sterling, at 1.144 to the Euro and with the US Dollar buying 3.659 Brazilian Real.
The London market started the day on Friday trading marginally south of par and with the New York market trading around par but with the London market soon recovering and attracting support and triggering buy stops, to take and aggressive surge into strong positive territory and peaking with gains of $ 41.00 per Mt., for the early afternoon trade. The New York market followed suit in a more modest manner and moved up into positive territory, but as the afternoon progressed both markets came under pressure and to see the New York market move back into negative territory and the London market, moving back to once again trade around par. The London market continued to trade close to par through to the close, but with the New York market losing its way in late trade.
The London market ended the day on a steady note and having recovered 83.3% of its earlier modest losses of the day by the close, while the New York market ended the day on a very negative note and with 93.6% of the earlier losses of the day intact. The soft end to the day for the New York market is likely to damage some confidence within this market, while with the Vietnamese off the field of play for the Tet New Year celebrations for this week, is likely to slow trade within the London market. But with the markets tending in the recent weeks to remain within the present trading range, it might assist towards a cautious and near to steady start for early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAR 1547 – 4 MAR 103.70 – 2.20
MAY 1571 – 1 MAY 106.80 – 2.20
JUL 1589 unch JUL 109.55 – 2.20
SEP 1607 + 1 SEP 112.30 – 2.20
NOV 1626 + 2 DEC 116.20 – 2.20
JAN 1643 + 2 MAR 120.00 – 2.15
MAR 1663 + 3 MAY 122.40 – 2.20
MAY 1682 + 3 JUL 124.60 – 2.25
JUL 1698 + 3 SEP 126.70 – 2.25
SEP 1716 + 3 DEC 129.70 – 2.25
