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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

25 Apr 2016
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market increase their net long position within the market by 56.76% during the week of trade leading up to Tuesday 22nd April; to register a net long position of 5,495 Lots. This net long position which is the equivalent of 1,557,808 bags has most likely been decreased, following the period of mixed but overall softer trade, which has since followed.

The July on July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 52.12 Usc/Lb., while this equates to a 42.30% price discount for the London robusta coffee market. This arbitrage remains 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 Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,360 bags on Friday; to register these stocks at 1,397,910 bags. The number of bags pending grading to the exchange registered a decline of 2,782 bags, to see these pending grading stocks at 2,339 bags on the day.

The commodity markets were mixed on Friday, as the US Dollar gained strength against the Yen and the Euro on the day. Meanwhile, with a new round of US Federal Reserve Bank meetings due to take place this week, speculation regarding any possibility of an interest rate hike to come from the USA., is an omnipresent theme within the markets. It was a lower result on the day for Oil, Gold, Silver, Platinum, Wheat, Soybean, Corn, Orange Juice and Sugar markets, a mixed day on the Coffee markets and a stronger finish for Cocoa and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.9875% lower to see this Index registered at 397.51. The day starts with a steady U.S. Dollar at 1.44 to Sterling and 1.1244 to the Euro, while North Sea Oil is steady in early trade and is selling at 43.08 per barrel.

The London Market started the day on a softer note on Friday, as did New York open on a mildly softer note. The morning ensued with very limited volume in both markets and with a holiday in Brazil on Thursday many taking the opportunity for a long weekend. The trading day’s volume increased as the afternoon progressed, however both markets lacked impetus and the day maintained a soft tone although with a degree of recovery from the lows, seen toward the latter half of the session. The markets finished the day after a relatively modest volume day and within a range bound mildly softer day for both markets, to set the close in negative territory on Friday, as follows:


MAY 1524 - 10                           MAY 122.75 – 0.80
JUL   1557 - 10                           JUL   123.35 – 0.75
SEP   1577 - 10                           SEP   125.05 – 0.80
NOV 1596 - 9                             DEC  127.30 – 0.85
JAN   1615 - 8                            MAR 129.50 – 0.85
MAR 1629 - 8                            MAY 131.00 – 0.85
MAY 1646 - 8                            JUL   132.30 – 0.95
JUL   1664 - 8                            SEP   133.50 – 0.95
SEP   1682 - 8                            DEC  135.25 – 1.00
NOV 1702 - 8                            MAR 136.65 – 1.15