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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

29 May 2017
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 short sold position within the market by 21.40% during the week of trade leading up to Tuesday 23rd May; to register a net short sold position of 15,986 Lots on the day. This net short-sold position which is the equivalent of 4,531,960 bags has most likely been little changed to perhaps marginally decreased, following the mixed but overall buoyant trade that has since followed.

The National Coffee Council of El Salvador have reported that the countries coffee exports for the month of April were 19,775 bags or 24.31% lower than the same month last year, at a total of 61,555 bags. This performance has contributed to the countries cumulative exports for the first seven months of the present October 2016 to September 2017 coffee year to being 5.2% lower than the same period in the previous coffee year, at a total of 232,599 bags.

The July to July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.73 usc/Lb., while this equates to 30.98% price discount for the London robusta coffee market. This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,523 bags on Friday; to register these stocks at 1,469,775 bags. There were 4,630 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,191 bags.

The commodity markets were mixed ahead of the G7 summit meetings on Friday, and a generally firmer day for the energy sector, while the US Dollar registered a better day against other major currencies and the G.B. Pound shed some recent gains. It was a softer day for Cotton, Copper, Sugar, Soybean, markets, a positive finish for Cocoa, Coffee, Corn, Wheat, Orange Juice, Gold, Silver, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.41% lower, to see this Index registered at 409.45. The day starts with the U.S. Dollar steady and trading at 1.282 to Sterling and at 1.116 to the Euro, North Sea Oil firm in early trade and is selling at $ 51.44 per barrel.

The day started immediately positive in both markets with London gapping higher as the session started the day, a similar start in New York met with a degree of selling activity in the early morning session, to send this market back to negative territory for a brief moment. London continued on a positive track for much of the morning but with sellers reappearing at the top of the market to push this market lower into the afternoon. The lows tested in both markets however, did not hold sway while external macro factors in the generally more positive mood of the commodity markets in general, provided a boost to these markets as the afternoon progressed. London and New York continued to post gains as the day progressed toward the close, although New York succumbed to another bout of selling activity to see this market still in the black but steady out into a very narrow range over the last few hours in this market. A strongly positive day in London saw this market hold on to much of the gains of the day almost to the close, when sellers returned to the floor to weigh in on this market and a softer turn but with much of the gains of the day still intact, ahead of the close in this market.

The coffee markets in London and New York are closed for business today as both markets celebrate respective holidays, the first trading day of the week for coffee and many other markets, will be tomorrow. The close set on Friday was on a buoyant note after a good volume day in both markets and near to the highs of the day, as follows;


MAY  1961 + 57
JUL    1991 + 57                        JUL   131.20 + 1.90
SEP    2002 + 52                        SEP   133.55 + 1.90
NOV   1997 + 46                       DEC  137.05 + 1.85
JAN    1987 + 41                       MAR 140.45 + 1.85
MAR  1981 + 41                       MAY 142.65 + 1.90
MAY  1940 + 40                        JUL   144.80 + 1.90
JUL    1995 + 36                        SEP   146.75 + 1.90
SEP    2009 + 36                        DEC  149.20 + 1.95
NOV  2016 + 36                        MAR 151.60 + 2.00

Kind regards,