Over the same week the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 1.39%, to register a net short position of 9,930 Lots. This net short sold position which is the equivalent of 2,815,111 bags has most likely been increased again, following the period of mixed but overall negative trade which has since followed and likewise, that of the short position of the Managed Money Funds.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net short sold position within the market by 17.03% over the week of trade leading up to Tuesday 20th. October; to register a net short sold position of 10,906 Lots on the day. This net long that is the equivalent of 1,817,667 bags has most likely been marginally increased, over the period of mixed but overall modestly negative trade that has since followed.

With the export registrations for the month of October in hand, the authorities in Vietnam are forecasting that the country’s exports of mostly robusta coffees for the month shall most likely result in coffee exports in the region of 1.58 million bags. This relatively modest number does not reflect the historically high internal market robusta coffee stocks, but rather the fact that in reaction to the soft nature of the related prices within the London market, that internal market price resistance is retarding the sales and liquidation of these stocks.

Meanwhile and with the month of October coming to a close, the latest economic figures from Vietnam have indicated that the country has suffered from an approximate 4.13 billion U.S. dollars trade deficit for the first ten months of this year, as against a 2.36 billion U.S. dollars trade surplus for the same period in the previous year. One might think that with internal market carryover stocks of past crop robusta coffees of a value of approximately 500 million to 700 million U.S. dollars, that the countries government might under these circumstances foresee some merit in encouraging their farmers and internal traders to liquidate and cash in these stocks.

But perhaps the negative impact that such an action upon the fortunes of the London market and this impact upon the value of the new crop coffee exports, is retraining the Vietnam authorities from trying to encourage such aggressive selling activity. Thus one might suggest that despite the country having to operate with a trade deficit, that the state authorities would prefer to see their coffee industry maintain its slow and steady and somewhat price resistant selling policy to try to accomplish as much value as possible on the longer term, out of what shall be a significant coffee stock position that shall be in place by the completion of the larger new crop harvest in January next year.

The second month arbitrage between the markets narrowed yesterday, to register this at 50.26 usc/Lb., while this equates to a 41.64% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,100 bags yesterday; to register these stocks at 1,909,053 bags. There was meanwhile a smaller in volume 1,900 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,769 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 3,167 bags on Friday 23rd. October; to register these stocks at 3,358,500 bags on the day.

The commodity markets were mixed in trade yesterday, but with the overall macro commodity index still remaining on a softer track for the day. The Sugar, Cocoa, Copper, Wheat, Corn, Gold and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Coffee, Cotton, Orange Juice, Soybean and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% lower to see this Index registered at 398.69. The day starts with the U.S. Dollar steady in early trade and trading at 1.535 to Sterling and 1.106 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 45.60 per barrel.

The London market and New York markets started the day yesterday on a hesitantly softer note and maintained an erratic and mostly negative track for most of the day, with the odd flurry into positive territory being short lived and unsustainable against the negative sentiment that comes with the Brazil rainfall reports. Both markets did however continue through the day to bounce off their lows and to limit the losses, to struggle through a day of thin and mostly lacklustre trade to a softer close. The London market ended the day on a modestly softer note and having recovered 66.7% of the earlier losses of the day by the close, while the New York market ended the day on a soft note and with 52.4% of the earlier losses of the day intact. This close does little to inspire but with the ability of the markets to shrug off negative pressure and the potential for some consumer industry catch up price fixation buying following a day of mostly being on the side-lines of the field of play yesterday, it might inspire a steady start for early trade today against the prices set yesterday, as follows:

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

NOV 1524 – 3                                       DEC    117.30 – 1.15
JAN 1553 – 5                                       MAR    120.70 – 1.10
MAR 1565 – 6                                     MAY    122.85 – 1.15
MAY 1583 – 8                                       JUL    124.80 – 1.15
JUL 1603 – 8                                         SEP    126.70 – 1.15
SEP 1623 – 7                                        DEC    129.50 – 1.10
NOV 1643 – 7                                      MAR   132.20 – 1.05
JAN 1663 – 7                                       MAY   133.95 – 1.10
MAR 1683 – 7                                       JUL    135.45 – 1.10
MAY 1717 – 8                                       SEP    136.80 – 1.10