The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund increase their net short position by 18.24% within this market over the week of trade leading up to Tuesday 8th. August 2023; to register a new net short position at 14,281 Lots. The longer term in nature Index Fund sector of this market increased their net long position by 2.75% within the market, to register a new net long position of 49,103 Lots on the day.     

Over the same week, the Non-Commercial Speculative increased their net short position by 11.13% within the market over the week of trade leading to Tuesday 8th. August 2023:  to register a new net short position of 15,509 lots, which is the equivalent of 4,396,733 bags. This net short position has most likely been increased following the period of mixed but overall sideways softer trade that has since followed. 

The Coffee Board of India have released provisional green bean export data for the first seven months of the 2023 calendar year to report that the country exported 2,840,384 bags or 7.86% less than the same period in the previous year. The Coffee Board have likewise reported their production estimate for the present October 2022 to September 2023 coffee crop to reach similar levels to the previous year at a total of 5.87 million bags. This figure in line with earlier reports from independent forecasters.

In this respect the Coffee Board foresee that the new robusta coffee crop will be 2.18% higher than the October 2020 to September 2021 robusta coffee crop at a total of 4.20 million bags, while they likewise foresee that the new arabica coffee crop shall be 5.69% bags higher than the October 2020 to September 2021 arabica coffee crop at a total of 1.67 million bags. The new monsoon season over the main coffee districts is underway and traditionally runs from June through to September, bringing with it good rains.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,564 bags yesterday, to register these stocks at 514,305 bags, with 98.19% of these certified stocks being held in, Europe at a total of 505,008 bags and the remaining 1.81% being held in the USA at a total 9,297. Of this, a total 151,732 bags, or 29.50% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 65.51% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

The September 2023 to September 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 32.26 usc/Lb. This equates to 21.35% price discount for the London Robusta coffee.

It was a softer day on the commodity markets yesterday, with the US Dollar gaining over 0.3% against a basket of other currencies, a firmer Dollar is seen to be a bearish factor for commodities traded in other currencies. The Cocoa, Soybean and Wheat markets ended the day on a positive note, while the Coffee, Corn, Sugar, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.268 Sterling, at 1.091 the Euro and with the US Dollar buying 4.963 Brazil Real.

The New York market started the day trading to the north of par on a modest firmer note, while the London markets started the day yesterday trading on a very positive note. The markets oscillated around par for the remainder of the early morning session. The late morning session saw the New York market attract some degree of selling pressure while the London followed suit albeit in a more sedate manner during the early session. The late morning session saw the markets continue to trend in a softer direction. As the afternoon progressed, speculative selling returned in volume to the New York floor to trigger stops along the way, the London followed suit and the markets continued to project lower with further long liquidation selling to accentuate the losses for the day’s trade. The selling activity started to wane toward the end of the days’ trade, to see the New York market narrowly recover some of the earlier losses of the day, while the London market settled on the low for the session.

The London market ended the day on a negative note with 100% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 94.37% of the earlier losses of the day intact. This follow through very soft close for the markets, with the New York and London markets losing ground throughout the day to settle on the lows of the day, one might see the markets set for a hesitant start to early trade today, against the prices set yesterday, as follows:

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

SEP     2620 – 52                                         SEP    151.10 – 6.70
NOV   2435 – 82                                         DEC   152.60 – 5.10
JAN    2379 – 85                                         MAR  153.95 – 4.85
MAR  2349 – 81                                         MAY  155.25 – 4.60
MAY  2336 – 78                                         JUL    155.90 – 4.50
JUL    2328 – 74                                         SEP    156.55 – 4.40
SEP    2323 – 73                                         DEC   157.65 – 4.35
NOV  2320 – 73                                         MAR   158.50 – 4.30