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

Coffee Market Report

22 Mar 2022

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 26.07% over the week of trade leading up to Tuesday 15th. March; to register a new net long position 28,915 Lots. Meanwhile the longer term in nature Index Fund sector of this market cut their net long position within the market by 3.34%, to register a net long position of 40,434 Lots on the day.

Over the same week, the Non-Commercial Speculative sector cut their net long position by 39.13% within the market over the week of trade leading up to Tuesday 15th. March: to register a net long position of 20,535 lots, which is the equivalent of 5,821,582 bags. This net long position has most likely been little changed following the period of marginally 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 decrease their net long position by 2.79% within the market over the week of trade leading up to Tuesday 15th. March 2022: to register a new net long position of 14,068 which is the equivalent of 2,344,667 bags.  This net long position has most likely been little changed following the period of marginally firmer trade that has since followed.

The May 2022 to May 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 125.99 usc/Lb. This equates to 56.08% 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 25,435 bags yesterday, to register these stocks at 1,111,056 bags, with 95.17% of these certified stocks being held in Europe at a total of 1,057,392 bags and the remaining 4.83% being held in the USA at a total 53,664. Of this, a total 534,694 bags, or 48.12% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 42.98% of these certified coffees, originating from Honduras. There were meanwhile a 26,880 bags decrease to the number of bags pending grading to the exchange; to register 56,320 bags pending grading on the day.

It was a firmer day on the commodity markets yesterday, with indications from the US Federal Reserve that further interest rate hikes may be on the card this year. The Oil, Sugar, Coffee, Wheat, Corn, Soybean, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the Cocoa market ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.313 Sterling, at 1.099 the Euro and with the US Dollar buying 4.936 Brazil Real.

The New York market started the day yesterday trading on a modest near to par softer note, while the London market started the day yesterday trading on a modest near to par firmer note. The markets continued to oscillate around par before taking a softer track into the mid-morning session. As the afternoon progressed the New York market started to add more value and quickly trigger buy stops along the way to accentuate the gains for the day. The London market followed suit with the influence of upward track within the New York market, to likewise add more value and trend positive, gaining momentum throughout the session.  the New York market was seen to settle near to the highs of the day on a firm note, while the London market followed suit albeit in a more sedate manner.

The London market ended the day on a positive note with 72.72% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 88.46% of the earlier gains of the day intact. This follow through firmer close firmer close for the markets and with the Brazil Real showing signs of buoyancy against the US Dollar, one might think that the markets may be pressured for a follow through steady start to early trade today, against the prices set yesterday, as follows:

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

MAY 2175 + 8                                            MAY 224.65 + 4.60
JUL 2145 + 9                                              JUL 224.45 + 4.80
SEP 2129 + 9                                              SEP 223.40 + 4.80
NOV 2115 + 10                                          DEC 221.00 + 4.65
JAN 2107 + 10                                           MAR 218.50 + 4.70
MAR 2104 + 11                                         MAY 216.75 + 4.85
MAY 2106 + 16                                         JUL 214.30 + 4.90
JUL 2109 + 16                                           SEP 211.35 + 5.00