I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

19 Apr 2021

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector raise their net long position by 64.99% within the market over the week of trade leading up to Tuesday 13th. April: to register a net long position of 11,317 which is the equivalent of 3,208,319 bags. This net long position has most likely been increased, following the period of 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 raised their net short position by 667.55% within the market over the week of trade leading up to Tuesday 13th. April: to register a new net short sold position of 4,068 Lots which is the equivalent of 678,000 bags. This net short position has most likely been increased following the period of sideways but overall firmer trade that has since followed.

Weather conditions in Brazil have been reported to be relatively dry across much of the coffee growing districts for the first days of April, with small pockets of rain being observed during the first half of the month.

The July-to-July contract arbitrage between the London and New York markets narrowed on Friday: to register this at 68.60 usc/Lb. This equates to 52.29% 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 8,559 bags on Friday, to register these stocks at 1,883,915 bags, with 95.1% of these certified stocks being held in Europe at a total of 1,792,077 bags and the remaining 4.9% being held in the USA at a total 91,838 bags. There was meanwhile a larger in number 11,520 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,360 bags.

It was a modest firmer 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 Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Cocoa and Coffee markets ended the day on a softer note. The day starts with the U.S. Dollar, trading at 1.385 Sterling, at 1.196 the Euro and with the US Dollar buying 5.587 Real.

The New York and London markets started the day on Friday trading on a modest firmer note, the markets continued to trade around par for the remainder of the early morning session. As the afternoon progressed both the New York and London markets came under a degree of selling pressure to see the markets drop back from the highs of the morning session and set on a softer track for the afternoon trade. The markets would soon hit a floor limiting the losses for the day to see the New York market recover slightly and settle on a very soft note for the day, with the London market following suit in a more sedate manner.

The London market ended the day on a negative note and with 50% of the earlier losses the day intact, while the New York market ended the day on a likewise negative note and with 89.74% of the earlier losses of the day intact. This softer close, does little to indicate direction, nor does it inspire confidence and one might think that the markets are due for little better than a hesitant steady start to early trade today, against the prices set on Friday, as follows:

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

JUL 1380 – 9                                         JUL 131.20 – 3.50
SEP 1397 – 7                                         SEP 133.15 – 3.40
NOV 1414 – 7                                       DEC 135.55 – 3.40
JAN 1428 – 8                                         MAR 137.50 – 3.35
MAR 1441 – 8                                       MAY 138.30 – 3.35
MAY 1458 – 8                                       JUL 138.80 – 3.25
JUL 1475 – 7                                         SEP 139.05 – 3.20
SEP 1493 – 7                                         DEC 139.40 – 3.15