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 25.40% within the market over the week of trade leading up to Tuesday 19th. April 2022: to register a net long position of 22,094 lots, which is the equivalent of 6,263,551 bags. This net long position has most likely been increased marginally following the period of mixed but overall firmer softer trade that has since followed.
The July 2022 to July 2022 contract arbitrage between the London and New York markets narrowed on Friday to register this at 131.17 usc/Lb. This equates to 57.75% 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 5,419 bags on Friday, to register these stocks at 1,105,535 bags, with 95.47% of these certified stocks being held in Europe at a total of 1,055,426 bags and the remaining 4.53% being held in the USA at a total 50,109. Of this, a total 551,112 bags, or 49.85% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.50% of these certified coffees, originating from Honduras. There was meanwhile a 6,220 bags decrease to the number of bags pending grading to the exchange; to register 30,944 bags pending grading on the day.
It was a softer day on the commodity markets on Friday, weighed by looming interest rate hike and a stronger US Dollar which is seen to be a bearish factor for many of the US Dollar based commodity markets when trading in other currencies. The London Robusta Coffee markets ended the day on a positive note, while the Sugar, Cocoa, New York Arabica Coffee, Corn, Wheat, Soybean, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.280 Sterling, at 1.077 the Euro and with the US Dollar buying 4.794 Brazil Real.
The New York and London markets started the day on Friday trading on a modest firmer note, both markets would quickly drop back below par to trend softer for the early morning session, the markets bounced off the early morning lows to recover and attract a degree of buying support. This saw both the New York and the London markets trend in a firmer direction for the remainder of the morning session. As the afternoon progressed the markets continued to trend firmer before seeing the gains for the day capped as the markets hit a ceiling. The New York and London markets were seen to drop back from the earlier highs of the day and track softer for the remainder of the session. This saw the New York market drop below par to settle on a softer note at the close, while the London market dropped back to settle near to unchanged for the day on a modest firmer note at the close.
The London market ended the day on a modest near to unchanged positive note with 33.33% of the earlier gains of the day intact, while the New York market ended the day on negative note with 34.54% of the earlier losses of the day intact. This mixed but mostly softer close for the markets does little to indicate direction, albeit that the markets recovered most of the losses of the day, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JUL 2116 + 2 JUL 227.15 – 0.95
SEP 2120 Unch SEP 227.05 – 1.10
NOV 2122 – 1 DEC 226.50 – 1.10
JAN 2119 – 1 MAR 225.35 – 1.15
MAR 2115 – 1 MAY 224.05 – 1.25
MAY 2111 – 1 JUL 222.15 – 1.20
JUL 2108 – 1 SEP 219.50 – 1.25
SEP 2103 – 2 DEC 216.85 – 1.30