Over the same week the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 4.59%, to register a net short position of 20,556 Lots. This net short sold position which is the equivalent of 5,827,535 bags has most likely been little changed, following the mixed but mostly sideways trade that has since followed.

The European Coffee Federation have reported that the declared coffee stocks held in the ports of Antwerp, Bremen, Hamburg, Genova, Le Havre and Trieste decreased by 72,683 bags or 0.61% during the month of October, to register the stocks at 11,852,400 bags as at the end of the month. These stocks fuel not only the Western European markets but also the Eastern European market, which total a demand of approximately 52 million bags, or approximately 1 million bags per week.

However if one is to consider that the stocks do not include bulk container transit coffees, roaster on site inventories and private stocks held in non-declared warehouses and thus one might look to add at the very least 2 million bags and possibly as much as 3 million bags to the number above. This would indicate that the overall coffee stocks within Europe as at the end of October would have been close to 14 million bags and are therefore sufficient in number, to fuel a very safe in excess of 14 weeks of roasting demand. A factor one would think which would have also contributed to the lack of confidence in the short term market, on the part of the both the European roasters and the speculative sectors of the terminal markets.

A report from India has indicated that with a 23% increase in robusta coffee exports last year as against a dip of 26% in arabica coffee exports for the year, the country’s overall coffee exports for 2015 were 3.5% higher than the previous year, at a total of 5,128,767 bags. These export numbers while impressive in terms of the Indian coffee crop of around 5.4 million bags per annum, do also include a high percentage of re-exports of processed robusta coffees, which the report indicates increased in volume by 22% in 2015.

The new robusta coffee harvest in Vietnam has almost finished and with many districts having already completed their harvest, to see the internal market now focus upon the storage of this larger new crop and the sales of new crop coffees. Thus the consumer market focus is now upon the potential surge in new crop robusta coffee supply and with industry buyers mostly taking something of a hand to mouth stance for new business, until such time as Vietnam robusta export prices fall more in line with the dictates of the London robusta coffee market. Thus it would appear for the present to be more a buyers rather than a sellers’ market, which does little to inspire confidence in the short terms prospects for the London market.

The March on March contracts arbitrage between the markets broadened yesterday, to register this at 54.64 usc/Lb., while this equates to a 44.42% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 7,640 bags yesterday; to register these stocks at 1,722,419 bags. There was meanwhile a larger in volume 5,785 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,341 bags.

The Certified Robusta coffee stocks held against the London market were seen to decline by 11,833 bags on Monday 4th. January; to see these stocks registered at 3,262,833 bags.

The commodity markets were mixed in trade yesterday, but with the Oil and Breakfast commodities taking a negative track and influencing the overall macro commodity index lower. The Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy and the Platinum market was steady, while the Oil, Natural Gas, Sugar, Cocoa, Coffee and Orange Juice markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% lower to see this Index registered at 376.75. The day starts with the U.S. Dollar showing buoyancy in early trade and trading at 1.466 to Sterling and 1.074 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 35.75 per barrel.

The London market started the day yesterday with modest losses, while the New York market started with immediate buoyancy and modest gains, but with the New York market shedding its gains and falling below par in early afternoon trade. The New York market briefly recovered into positive territory as the afternoon progressed but soon fell modestly below par, while the London market continued on its softer sideways track. There was no further excitement for the day but with the Brazil Real tending to steady it seemingly restricted the downside for the more emotive and volatile New York market and both markets took a softer sideways track for the rest of the day. The London market continued to end the day on a soft note and with 75% of the earlier losses of the day intact, while the New York market ended the day on a marginally softer note, but having recovered 58.1% of the earlier losses of the day by the close. This softer close and with the U.S. dollar showing some early muscle for the day is likely to inspire little better than a near to steady start for early trade today against the prices set yesterday, as follows:

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

JAN 1465 – 16                                         MAR 123.00 – 0.90
MAR 1507 – 21                                       MAY 125.10 – 0.90
MAY 1537 – 19                                         JUL 127.10 – 0.85
JUL 1564 – 19                                           SEP 128.75 – 0.90
SEP 1587 – 19                                          DEC 131.20 – 0.80
NOV 1608 – 18                                        MAR 133.50 – 0.70
JAN 1625 – 18                                         MAY 134.95 – 0.65
MAR 1644 – 18                                          JUL 136.25 – 0.70
MAY 1666 – 18                                          SEP 137.35 – 0.65
JUL 1691 – 18                                            DEC 138.65 – 0.80