The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector cut their net long position by 26.67% within the market over the week of trade leading up to Tuesday 12th. January: to register a new net long position of 16,014 which is the equivalent of 4,539,898 bags. This net long position has most likely been further decreased, following the period of mixed but overall firmer trade that has since followed.
The Green Coffee Association of the U.S.A. have announced that the country’s port warehouse stocks increased by 169,195 bags or 2.91% during the month of December, to register these stocks at 5,978,301 bags at the end of the month. Of this total, 84,276 bags were registered in the U.S. Certified coffee stock warehouses at the time of reporting. The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 585,000 bags per week, would conservatively have been at least 1.2 million bags.
This marks the first month since June 2020 that the U.S Green Coffee Stocks have increased. The current levels of coffee stocks, which include the certified coffee stocks that are held in certified warehouses and registered to the New York exchange, are still viewed to be well above the historic low registered in 2011 of 4 million bags.
Thus, if one is to consider the additional unreported stocks that are being held in private inventories at the end of month, this would equate to more than ten weeks of roasting activity, which most would consider to be a very safe reserve. Especially so ahead of the pending deliveries from the new Mexican and Central American crop, which will join the steady deliveries from Brazil, Colombia and Vietnam.
Today is the Martin Luther King Day holiday in the U.S.A. and this market will be off the field of play for the day, which is likely to set the London market for something of a dull and low volume day of trade, with less than three weeks ahead of the week long shut down of the Vietnam market for the countries Tet holidays, one might expect to see some price fixation activity for the London market coming to the fore.
The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed on Friday: to register this at 66.78 usc/Lb. This equates to 52.11% 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 8,592 bags on Friday, to register these stocks at 1,519,310 bags, with 94.5% of these certified stocks being held in Europe at a total of 1,435,034 bags and the remaining 5.5% being held in the USA at a total 84,276 bags. There was meanwhile a smaller in number 6,942 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 132,217 bags.
It was a softer day overall on the commodity markets on Friday, to see the overall macro commodity index taking something of a sideways track for the day. The Cocoa and Coffee markets ended the day on a positive note, while the Sugar market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6665% lower; to see this index registered 472.4744. The day starts with the U.S. Dollar, trading at 1.36 Sterling, at 1.21 the Euro and with the US Dollar buying 5.29 Real.
The New York and London markets started the day on Friday trading on a modest softer note, both markets quickly changed momentum to see the markets trend firmer for the remainder of the morning session. As the afternoon progressed the New York market hit a ceiling limiting the gains for the day’s session to see the market fall back from the highs of the day and settle on a modest firm note, while the London market followed suit trending firmer in the afternoon session but also to hit a ceiling limiting the gains for the day and to see the market settle on a firmer note at the close.
The London market ended the day on a positive note with 63.64% of the earlier gains of the day intact, while the New York ended the day on a positive note with 18.18% of the earlier gains of the day intact. The New York market is closed today, and one might suspect that the London market shall be due for a slow and steady start for early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAR 1353 + 21 MAR 128.15 + 0.80
MAY 1363 + 21 MAY 130.25 + 0.85
JUL 1378 + 23 JUL 132.15 + 0.90
SEP 1397 + 23 SEP 134.00 + 0.95
NOV 1416 + 23 DEC 136.00 + 0.95
JAN 1431 + 23 MAR 137.80 + 0.95
MAR 1447 + 23 MAY 138.65 + 0.85
MAY 1464 + 23 JUL 139.35 + 0.75