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

Coffee Market Report

08 Dec 2021

7th. December 2021.
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 cut their net long position within this market by a nominal 859 Lots over the week of trade leading up to Tuesday 30th November; to register a new net long position 56,303 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1,524 Lots, to register a net long position of 56,303 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector cut their net long position by 1.71% within the market over the week of trade leading up to Tuesday 30th. November:  to register a net long position of 47,573 lots, which is the equivalent of 13,486,735 bags. This net long position has most likely been little changed 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 raise their net long position by 6.52% within the market over the week of trade leading up to Tuesday 30th. November: to register a new net long position of 35,754 Lots which is the equivalent of 5,959,000 bags.  This net long position has most likely been increased further following the period of firmer trade that has since followed.

The January 2022 to March 2022 contract arbitrage between the London and New York markets widened yesterday, to register this at 140.00 usc/Lb. This equates to 56.06% price discount for the London Robusta coffee market.  This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,302 bags yesterday, to register these stocks at 1,600,374 bags, with 95.65% of these certified stocks being held in Europe at a total of 1,530,771 bags and the remaining 4.35% being held in the USA at a total 69,603 bags.  Of this, a total 764,190 bags, or 47.75% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 53.05% of these certified coffees, originating from Honduras.  There was a 13,688 bag decrease to the number of bags pending grading to the exchange; to register 47,366 bags pending grading on the day.

It was a mixed day on the commodity markets yesterday, the primary focus of the markets the economic data pointing toward inflationary data to come from the leading USA consumer market, coinciding with anticipated fiscal reaction by the US Federal Reserve bank for potential interest rate increases possibly in the future. It was a softer day for Corn, Cocoa, Soybean, Gold, Silver, while Coffee, Sugar, Wheat, Platinum, Palladium markets ended the day on a firmer note. The day starts with the U.S. Dollar trading at 1.325 Sterling, at 1.126 the Euro and with the US Dollar buying 5.689 Brazil Real.  

The New York and London markets started the day in relatively thin volume and on a firmer note yesterday, the New York market tracking testing higher highs through mid-session. The London robusta market pushing lower, while a firmer trend built as activity increased in New York. The arrival of the America’s at the start of their business day pushed New York higher, triggering further buy stops along the way. The London market gradually followed the track upward. The upward momentum in New York was capped briefly with the introduction of volume selling activity which came in at the top of the morning session, though as the afternoon progressed, the dip lower reversed once again, boosted by strong speculative buying activity, to see the New York market finish the day on the new high set, on the close on the day. It was a gradual climb to the top of the day for London which finished the day on a positive note, just off the days highs. The markets set the close yesterday on a firm note against the prices set on Friday, as follows:      

LONDON ROBUSTA US$/MT                     NEW YORK USC/LB.                                     

JAN    2420 + 34                                               MAR   249.85 + 6.50
MAR    2315 + 17                                               MAY   248.80 + 6.40
MAY    2280 + 9                                                 JUL     247.15 + 6.10
JUL      2276 + 10                                                SEP     245.00 + 5.45
SEP      2272 + 10                                                 DEC    243.50 + 5.00
NOV     2274 + 10                                               MAR   242.65 + 4.55
JAN     2279 + 10                                                MAY    241.85 + 4.15
MAR    2277 + 10                                               JUL      241.15 + 3.80