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

 

I. & M. Smith (Pty) Ltd.

Coffee Market Report

09 Dec 2019
The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within this market by 87.41% over the week of trade leading up to Tuesday 3rd. December; to register a new short sold position of 956 Lots. This net short-sold position which is the equivalent of 271,022 bags has most likely been further decreased, following the period of mixed but overall softer trade that has since followed.

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market decrease their net short sold position within the market by 5.19% over the week of trade leading up to Tuesday 3rd. December; to register a short-sold position of 16,518 Lots. This net short sold position which is the equivalent of 2,753,000 bags has most likely been further decreased, following the period of mixed but overall softer trade that has since followed.

Recent rains in Brazil have improved soil moisture in most of the coffee areas, forecasts predict a fair amount of rain to fall over the Southeast coffee growing areas in the next ten days, however more rain is needed to increase the soil moisture as high as possible before the summer heat season starts.

The March to March contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 60.75 usc/Lb. This equates to 48.68% 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 2,161 bags on Friday; to register these stocks at 2,065,763 bags, with 87.4% of these certified stocks being held in Europe at a total of 1,804,575 bags and the remaining 12.6% being held in the USA at a total of 261,188 bags. There was a smaller in number decrease to the number of bags pending grade to this exchange, by 1,720 bags; to register these pending grading stocks at 34,313 bags.

The commodity markets were mixed in trade on Friday, to see overall macro commodity index taking a buoyant sideways track for the day. The Oil, Natural Gas, Sugar, Cocoa, Robusta Coffee, Cotton, Copper, Wheat and Soybean markets ended the day on a positive note, the Corn market ended the day unchanged, while the Arabica Coffee, Orange Juice, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.0898% higher; to see this index registered at 405.1672. The day starts with the U.S. Dollar steady, trading at 1.316 to Sterling, at 1.106 to the Euro and with the US Dollar buying 4.141 Brazilian Real.

The London and New York markets started the day on Friday trading around par, both markets maintained this modest positive stance into the early afternoon trade. As the afternoon progressed the New York markets started to selling pressure to move into modest negative territory for the day, while the London market maintained its firm track for the remainder of the afternoon trade.

The London market ended the day on a positive note, and with 61.1% of the earlier gains of the day intact, while the New York market ended the day on modest negative note, and with 5% of the earlier losses of the day intact. This close is unlikely to inspire confidence and one might expect the markets are due for only a hesitant near to steady start for early trade today, against the prices set on Friday, as follows:

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

JAN 1402 + 22                                                              MAR 124.80 – 0.05
MAR 1412 + 11                                                            MAY 126.95 – 0.05
MAY 1426 + 8                                                              JUL 128.70 – 0.10
JUL 1443 + 8                                                                SEP 130.35 – 0.05
SEP 1462 + 9                                                                DEC 132.30 unch
NOV 1482 + 8                                                              MAR 134.15 – 0.10
JAN 1504 + 8                                                                MAY 135.40 – 0.15
MAR 1528 + 8                                                              JUL 136.65 – 0.20
MAY 1552 + 9                                                              SEP 137.90 – 0.25