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 4.39% over the week of trade leading up to Tuesday 3rd. May; to register a new net long position 26,980 Lots. Meanwhile the longer term in nature Index Fund sector of this market marginally cut their net long position within the market by 0.41%, to register a net long position of 39,721 Lots on the day.

Over the same week, the Non-Commercial Speculative sector cut their net long position by 5.59% within the market over the week of trade leading up to Tuesday 3rd. May: to register a net long position of 21,858 lots, which is the equivalent of 6,196,646 bags. This net long position has most likely been little decreased following the period of softer 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 raise their net long position by 17.21% within the market over the week of trade leading up to Tuesday 3rd. May 2022: to register a new net long position of 15,443 Lots which is the equivalent of 2,573,833 bags.  This net long position has most likely been decreased marginally following the period of softer that has since followed.

The macro-economic environment continues to impact upon the global commodity markets and supply chains which is being felt all on fronts concurrently; The US Dollar has gained ground to reach close to a twenty year high, along with the most recent lockdown developments within China and in particular the city of Shanghai, which continue to intensify, pressuring the already vulnerable global supply chain.

The Brazil Real currency has weakened by 6.25% against the US Dollar over the past 7 days. A stronger US Dollar traditionally encourages export selling from Brazil’s coffee producers, as this assists to boost returns in local Brazil Real Terms.

The July 2022 to July 2022 contract arbitrage between the London and New York markets narrowed yesterday to register this at 114.47 usc/Lb. This equates to 55.54% 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 decrease by 4,525 bags yesterday, to register these stocks at 1,117,072 bags, with 95.51% of these certified stocks being held in Europe at a total of 1,066,963 bags and the remaining 4.49% being held in the USA at a total 50,109. Of this, a total 572,418 bags, or 51.24% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 40.40% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 25,230 bags pending grading on the day.

It was a follow through softer day on the commodity markets yesterday, to see the overall macro commodity index taking something of a negative track for the day, this as the US Dollar strengthened to near on a 20-year high. The latest round of interest rate hikes announced by the US Federal Reserve contributing toward a degree of speculative liquidation. The Palladium market ended the day on a positive note, while the Coffee, Cocoa, Sugar, Corn, Soybean, Wheat, Gold, Silver and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.237 Sterling, at 1.058 the Euro and with the US Dollar buying 5.162 Brazil Real.

The New York and London markets started the day yesterday trading on a modest near to par softer note. Both markets would oscillate around par for the remainder of the early morning session before starting to attract a degree of selling pressure which would see the markets trend to softer for the remainder of the morning session, accentuating the losses for the session. As the afternoon progressed the New York and London markets would continue to project in a negative direction which would see the markets soon hit a floor for the day, pressured by long liquidation selling. Both the New York and the London markets rebounded from the lows of the day to stage a modest recovery late during the afternoon session. This saw the New York market recover some of the earlier losses of the day to settle on a very soft note, with the London market following the trend to likewise settle on a very soft note at the close.

The London market ended the day on a negative note with 90% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 61.27% of the earlier losses of the day intact. This follow through softer close for the third consecutive trading day does little to inspire confidence nor indicate direction for the markets, albeit that the New York market recovered some of the earlier losses of the day, one might think that the markets may be pressured for a follow through hesitant start to early trade today, against the prices set yesterday, as follows:

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

JUL 2020 – 63                                              JUL 206.10 – 4.35
SEP 2020 – 59                                              SEP 206.05 – 4.40
NOV 2018 – 54                                            DEC 205.65 – 4.45
JAN 2014 – 49                                             MAR 204.95 – 4.40
MAR 2012 – 44                                           MAY 204.05 – 4.30
MAY 2009 – 42                                           JUL 202.55 – 4.20
JUL 2007 – 42                                             SEP 200.40 – 4.05
SEP 2004 – 40                                             DEC 198.05 – 3.90