|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 increase their net short sold position within the market by 203.1% over the week of trade leading up to Tuesday 27th. October; to register a net short sold position of 13,606 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.2%, to register a net long position of 26,228 Lots on the day.
Over the same week the Non Commercial Speculative sector of this market increased their net short sold position within the market by 94.91%, to register a net short position of 19,354 Lots. This net short sold position which is the equivalent of 5,486,773 bags has most likely been decreased again, following the period of mixed but overall more positive trade which has since followed and likewise, that of the short sold 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 8.29% over the week of trade leading up to Tuesday 27th. October; to register a net short sold position of 11,810 Lots on the day. This net long that is the equivalent of 1,968,333 bags has most likely been decreased again, over the period of mixed but overall more positive trade that has since followed.
The European Coffee Federation have reported that the declared coffee stocks held in the ports of Antwerp, Bremen, Hamburg, Genova, Le Havre and Trieste increased by 96,216,667 bags or 0.81% during the month of August, to register the stocks at 12,005,650 bags as at the end of the month. These stocks fuel not only the Western European markets but also the Eastern European market, which total a demand of approximately 52 million bags, or approximately 1 million bags per week.
However if one is to consider that the stocks do not include bulk container transit coffees, roaster on site inventories and private stocks held in non-declared warehouses and thus one might look to add at the very least 2 million bags and possibly as much as 3 million bags to the number above. This would indicate that the overall coffee stocks within Europe as at the end of August would have been close to 14 million bags to 14.5 million bags as at the end of August and sufficient in number, to fuel a very safe in excess of 14 weeks of roasting demand. A factor one would think which would have also contributed to the lack of confidence in the short term market, on the part of the speculative sector of the markets.
The latest Brazil weather reports indicate that the recent rains have seemingly saved the day for the prospects for the next 2016 arabica coffee crop, with the rains having come in time to eliminate the threat of damage that came with the hot and dry weather over the first three weeks of last month. But there are still concerns over the negative effects of the dry weather that has been encountered over the eastern conilon robusta districts of the country, which shall potentially reduce the potential for the next conilon crop.
This threat to the longer term Brazil conilon robusta coffee supply does not however have any short term impact upon world robusta coffee supply, as there are still the large Vietnam robusta coffee stocks and new crop robusta coffees hanging over the market. There is however with the potential for longer term tightening of robusta coffee supply that comes with the possibility of a modest conilon robusta crop next year, the probability that it shall inspire some degree of continued price resistant holding of robusta coffee stocks in Vietnam which is by nature modestly supportive for the fortunes of the London market.
The second month arbitrage between the markets narrowed yesterday, to register this at 48.26 usc/Lb., while this equates to a 39.51% 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 decrease by 2,162 bags yesterday; to register these stocks at 1,897,878 bags. There was meanwhile a smaller in volume 1,343 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,320 bags.
The Certified Robusta coffee stocks held against the London exchange were seen to remain unchanged on Friday 30th. October; to register these stocks at 3,346,167 bags on the day.
The commodity markets were once again on a back foot for the start of the week’s trade yesterday, with the overall commodity index taking a modestly softer track for the day. The Sugar and Cocoa markets nevertheless had a day of buoyancy and the Orange Juice market was steady, while the Oil, Natural Gas, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.32% lower to see this Index registered at 399.80. The day starts with the U.S. Dollar steady in early trade and trading at 1.542 to Sterling and 1.102 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 48.00 per barrel.
The London and New York markets started the day yesterday on a near to steady note and took a hesitant track into the afternoon trade, with both markets coming under pressure as the afternoon progressed. The London market did however manage to bounce back from lows and to limit the losses to take a more modest negative track to the close, while the New York market settled back to take a sideways soft track through to the close. The London market ended the day on a softer note but having recovered 65% of the earlier losses of the day by the close, while the New York market ended the day on a soft note and with 72.4% of the earlier losses of the day intact by the close. This close provides mixed signals and with the London market seemingly still showing a degree of stability, while the New York market is looking somewhat negative and one might think that there shall be at best a near to steady start for early trade today against the price set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
NOV 1595 – 21 DEC 118.80 – 2.15