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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

19 Nov 2019

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 decrease their net short sold position within the market by 71.9% over the week of trade leading up to Tuesday 12th November; to register a new net short sold position of 11,420 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.06%, to register a net long position of 50,031 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 58.1%; to register a new net short sold position of 16,700 Lots. This net short-sold position which is the equivalent of 4,734,376 bags has most likely been further decreased, following the period of mixed but overall softer trade that has since followed and likewise, that of the Managed Money Fund sector of the market.

The December to January contracts arbitrage between the New York and London markets broadened yesterday; to register this at 43.32 usc/Lb. This equates to 41.04% 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 2,214 bags yesterday; to register these stocks at 2,180,365 bags, with 87.1% of these certified stocks being held in Europe at a total of 1,899,984 bags and the remaining 12.9% being held in the USA at a total of 280,381 bags. There was no change to the number of bags pending grade to this exchange; to register these pending grading stocks at 44,257 bags.

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Sugar, Wheat, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Cocoa, Coffee Copper, Orange Juice, Corn and Soybean markets ended the day on a softer note. The day starts with the U.S. Dollar showing some degree of buoyancy and steady, trading at 1.296 to Sterling, at 1.108 to the Euro and with the US Dollar buying 4.22 Brazilian Real.

The London market started the day trading on a modest soft note, while the New York market started the day trading to the north of par. As the afternoon progressed the London market maintained this soft stance while the New York market started to attract buying support to move into positive territory for the day, however with the weaker nature of the Brazil Real, the New York market dropped back from the highs of the day to close in negative territory for the day. The London market closed maintained the soft stance to close on a negative note.

The London market ended the day on a negative note, and with 66.7% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, and with 60% of the earlier losses of the day intact. This close and with a weaker Brazil Real in play, does little to inspire confidence and one might expect the markets are due for little better than a hesitant steady start for early trade today, against the prices set yesterday, as follows:

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

NOV 1335 – 26                                                             DEC 105.55 – 0.60
JAN 1372 – 26                                                               MAR 109.20 – 0.45
MAR 1394 – 23                                                             MAY 111.55 – 0.45
MAY 1412 – 21                                                             JUL 113.65 – 0.50
JUL 1431 – 20                                                               SEP 115.60 – 0.45
SEP 1449 – 19                                                               DEC 118.00 – 0.40
NOV 1468 – 19                                                             MAR 120.35 – 0.35
JAN 1487 – 19                                                               MAY 121.90 – 0.35
MAR 1512 – 17                                                             JUL 123.45 – 0.40