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 raise their net long position within this market by 6.26% over the week of trade leading up to Tuesday 29th. December; to register a new net long position of 22,090 lots. Meanwhile the longer term in nature Index Fund sector of this market also raised their net long position within the market by 0.18%, to register a net long position of 60,486 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market raised their net long position within the market by 8.67% to register a new net long position of 23,122 Lots which is the equivalent of 6,554,985 bags. This net long position has most likely been increased, following the period of mixed but overall firmer trade that 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 cut their net long position within the market by 3.86% over the week of trade leading up to Tuesday 29th. December: to register a new net long position of 4,450 Lots which is the equivalent of 741,667 bags.  This net long position has most likely been decreased, following the period of mixed but overall softer sideways trade that has since followed.

The International Coffee Organisation ICO have reported that the global coffee exports for the month of November were 5.73% higher than the same month last year, at a total of 10.15 million bags. This they say, has contributed to the cumulative global coffee exports for the first two months of the October 2020 to September 2021 coffee year to be 6.5% higher than the same period in the year, at a total of 20.20 million bags.

The International Coffee Organisation ICO have also come forth with their latest report to maintain their forecast for global supply and demand signals, to report that against a global coffee supply of 168.55 million bags, for the October 2019 to September 2020 coffee year, global coffee consumption is estimated at approximately 167.59 million bags. This indicating that the global coffee markets are in a narrow surplus supply, which the ICO estimate to be 961,000 bags for the October 2019 to September 2020 coffee year.

There may be some degree of pressure due upon the London coffee market coming from price fixation hedge selling on the part of exporters in Vietnam, as they build up new crop robusta coffee stocks from the relatively free selling farmers. This related to the bid by many farmers to build up cash resources in the less than 5 weeks now left, ahead of the weeklong Tet New Year (Year of the Buffalo) celebrations, which kick off on the 12th February.

This aside there is little in the way of striking fundamental news coming to the markets form the main producer blocs and the focus shall now be with the new crop cherries starting to develop, upon the forecasts that are due for the prospects of the new 2021 Brazil crop. So far, most forecasts indicate that the Brazil crop will be relatively lower due to the biennially bearing nature of this crop.

The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 63.19 usc/Lb. This equates to 50.51 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 22,741 bags yesterday, to register these stocks at 1,449,798 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,364,780 bags and the remaining 5.9% being held in the USA at a total 85,018 bags. There was meanwhile a larger in number 23,197 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 113,375 bags.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive track for the day. The Sugar market ended the day on a positive note, while the Cocoa and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.8128% higher; to see this index registered 470.0339. The day starts with the U.S. Dollar, trading at 1.361 Sterling, at 1.230 the Euro and with the US Dollar buying 5.285 Real.

The New York and London markets started the day yesterday trading on a modest soft note, both markets continued on this path for most of the morning session, oscillating around par. As the afternoon progressed the New York market attracted a large degree of selling pressure to see the market drop back from the relative highs of the morning session and to trend very lower for the early afternoon session, the London market followed suit in a more sedate manner. Both markets bounced back off these lows of the day and recovered to a degree, to see both the London and the New York markets settle relatively lower for the day.

The London market ended the day on a modest negative note with 58.33% of the earlier losses of the day intact, while the New York ended the day on a likewise negative note with 25.97% of the earlier losses of the day intact. This softer close does little to indicate direction, albeit that the New York market recovered considerably from the earlier in the day losses, one might think that the markets are due for little better than a follow-through hesitant steady start to early trade today, against the prices set on yesterday, as follows:

LONDON ROBUSTA US$/MT               NEW YORK ARABICA USc/Lb.

MAR 1365 – 7                                             MAR 125.10 – 1.05
MAY 1374 – 8                                             MAY 127.10 – 1.00
JUL 1387 – 8                                               JUL 128.90 – 0.90
SEP 1401 – 9                                               SEP 130.40 – 0.85
NOV 1416 – 9                                             DEC 132.20 – 0.70
JAN 1432 – 9                                              MAR 133.80 – 0.65
MAR 1448 – 9                                            MAY 134.50 – 0.60
MAY 1465 – 9                                            JUL 135.20 – 0.50