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

Coffee Market Report

02 Feb 2016
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 decrease their net short sold position within the market by 8.17% over the week of trade leading up to Tuesday 26th. January; to register a net short sold position of 23,251 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.69%, to register a net long position of 29,895 Lots on the day.

Over the same week the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 6.76%, to register a net short position of 29,911 Lots. This net short sold position which is the equivalent of 8,479,636 bags has most likely been little changed, following the period of mixed but overall mostly sideways trade, which has since followed.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market decrease their net short sold position within the market by 8.16% over the week of trade leading up to Tuesday 26th. January; to register a net short sold position of 27,209 Lots on the day. This net short sold position that is the equivalent of 4,534,833 bags has most likely been little changed, over the period of mixed but overall sideways trade, which has since followed.

The end month export figures for the month of January from the Central American producers are coming to the fore, with Honduras reporting exports for the month to have been 9,958 bags or 1.89% higher than the same month in the previous year, at a total of 535,628 bags. Costa Rica however has reported that their coffee exports for the month were 18,391 bags or 19.74% lower than the same month last year, at a total of 74,753 bags.

The preliminary coffee export figures for the month of January from Brazil have also been announced, with the country reporting that their coffee exports for the month were 239,641 bags or 8.79% lower than the same month last year, at a total of 2,485,113 bags.

The May on May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 56.08 usc/Lb., while this equates to a 46.79% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, with the good discount most likely due to remain in place for the foreseeable future, in line with steady robusta shipments out of Vietnam.

The London market opened the day yesterday on a follow through softer note and followed by a softer start for New York market, with both markets remaining on a negative track into the afternoon trade. As the afternoon progressed though, the New York market started to recover and moved back into positive territory, while the London market recovered most of the earlier losses of the day. The New York market maintained its positive stance for the day, but the London market remained under selling pressure. The London market ended the day on a soft note but having recovered 64 7% of the earlier losses of the day, while the New York market ended the day on appositive note and with 90% of the earlier gains of the day intact. This mixed but perhaps overall steady close being likely to inspire a steady start for early trade today against the prices set yesterday, as follows:

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

MAR 1375 – 7                                       MAR 117.75 + 1.40
MAY 1408 – 6                                       MAY 119.95 + 1.35
JUL 1439 – 4                                            JUL 121.50 + 1.25
SEP 1464 – 6                                            SEP 123.15 + 1.25
NOV 1486 – 6                                         DEC 125.40 + 1.30
JAN 1506 – 8                                          MAR 127.65 + 1.30
MAR 1527 – 8                                        MAY 128.90 + 1.30
MAY 1549 – 8                                          JUL 130.00 + 1.25
JUL 1574 – 8                                            SEP 131.05 + 1.20
SEP 1587 – 8                                           DEC 132.30 + 1.20