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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

18 Jul 2017

18th July, 2017.

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 reduce their net short sold position within the market by 6.50% over the week of trade leading up to Tuesday 11th. July; to register a new net short-sold position of 39,805 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by a marginal 1.27%, to register a net long position of 33,010 Lots on the day.

Over the same week, Non-Commercial Speculative sector of this market increase their net short sold position within the market by 1.13% during the week of trade leading up to Tuesday 11th July; to register a net short sold position of 41,057 Lots on the day. This net short-sold position which is the equivalent of 11,767,234 bags has most likely been decreased, following the period of overall firmer trade, which has since followed.

The latest Commitment of Traders report from the London robusta coffee market reported the Speculative Non-Commercial sector of this market to have reduced their net long position within this market by 0.11% during the week of trade leading up to Tuesday 11th. July; to register a net long position of 19,291 Lots. This net long position which is the equivalent of 3,215,167 bags has most likely been marginally increased following the period of mixed but overall more positive trade that has since followed.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 180,422 bags or 2.53% during the month of June, to register these stocks at 7,294,945 bags at the end of the month. This is the seventh consecutive month of increase reported to the green coffee stocks being held in U.S.A. and is noted to be the highest figure recorded for these stocks, in twenty-three years.

The reported green coffee stocks that are being held in U.S.A. warehouses do include the exchange certified green coffee stocks that were being held by the America certified warehouses of the Exchange, in Houston, Miami, New Orleans, New York and Virginia, which at the time of reporting were a relatively low combined total of 460,077 bags being held in American certified stock exchange warehouses at the end of June.

The combination green coffee stocks reported on a month to month basis, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, may have been slightly reduced with roasting demand traditionally lower over the summer holiday months, but if one is to consider additional unreported stocks at month end, this in combination would equate to approximately 14.82 weeks of roasting activity, which may be considered to be more than sufficient stock of coffees that are readily available to call upon held within the consumer country port warehouses.

The September to September contracts arbitrage between the London and New Yk markets widened yesterday, to register this at 37.11 usc/Lb., while this equates to 27.79% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,902 bags yesterday; to register these stocks at 1,546,139 bags. There was an increase of 19,417 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,695 bags.

It was an overall steady to softer performance on the commodity markets yesterday, commodities boosted by the positively perceived latest round of economic indicators to come from China, the U.S. Dollar had a another softer session as was it a lower day for the leading in influence oil markets. Apart from the Energy sector, it was a lower for Sugar, Cocoa, Coffee, Corn, Wheat and Soybean markets, It was similarly a lower day for Orange Juice but a better day for Copper, Cotton and a higher close for the day for Precious Metals, Gold, Silver, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index registered an increase of 0.0815% on the day to register at 403.12. The day starts with the U.S. Dollar steady and trading at 1.309 to Sterling and at 1.152 to the Euro, while North Sea Oil is steady and is selling at US$ 47.29 per barrel.

The coffee markets started the day in narrowly softer trade for London and just above the close in New York in relatively active opening volume. The London market remained within a tight and negative range for much of the morning session, even as New York managed to push higher ahead of the America’s coming to the market for the day, to see London clamber into positive territory briefly. The earlier gains in New York although modest were quickly capped as the day progressed and with the new activity brought to the floor by the business day opening in the America’s and a softer session ensued to see both markets slip back into negative territory through midsession heading into the afternoon. Another attempt in New York to the positive took hold, to see both markets move through to positive but as the afternoon session drew toward the close, both markets slipped below par once more. The outright trades were narrowly held in a tight range in New York right to the end of the day, which finally settled just below unchanged, although not as fortunate a close in London, which met with additional selling pressure just as the final bell rang, to set the close yesterday, hardly changed in New York and at the day’s low in the final moments of trade in London, as follows:


JUL   2140 – 25                           JUL 131.55 – 0.15
SEP   2126 – 20                           SEP 133.55 – 0.15
NOV 2109 – 21                           DEC 137.15 – 0.15
JAN   2087 – 20                           MAR 140.60 – 0.15
MAR 2070 – 19                           MAY 142.85 – 0.10
MAY 2075 – 19                           JUL 145.00 – 0.15
JUL   2090 – 19                           SEP 147.05 – 0.15
SEP   2100 – 19                           DEC 149.90 – 0.15
NOV 2113 – 19                           MAR 152.65 – 0.15
JAN   2120 – 19                           MAY 154.20 – 0.15