Over the same week the Non Commercial Speculative sector of this market increased their net short sold position within the market by 22.25%, to register a net short position of 29,201 Lots. This net short sold position which is the equivalent of 8,278,354 bags has most likely been increased further, following the mixed but overall negative trade that has since followed and likewise, that of the short sold position of the Managed Money Funds.

One might comment that it is interesting to see the longer term and focused Index Funds seemingly taking advantage of the relatively low market values, to start to increase their longer term holdings within the coffee market. This show of confidence might perhaps be modestly supportive for longer term sentiment, within the markets.

The National Coffee Association of Guatemala have reported that the countries coffee exports for the month of October were 18,563 bags or 27.98% lower than the same month last year, at a total of 47,792 bags. This figure is however ahead of the new crop that is only now starting to be harvested is of little consequence, as it more than likely is made up from forward sold stocks from the last crop. While in terms of the new crop the early forecasts are for this crop to be close to 10% larger than the previous crop, at approximately 3.4 million bags.

The Agriculture, Fisheries and Food Authority in Kenya have voiced their confidence that the countries coffee production for this present October 2015 to September 2016 coffee year shall increase by 22% over the previous coffee year, to total approximately 833,000 bags. This forecast would seem to be in line with most other trade and industry forecasts within the country that have so far been indicating a figure of approximately 800,000 bags, albeit this new forecast is a little more ambitious.

The new Vietnam coffee harvest is starting to pick up in volume, but with the harvest having had a slow start with the combination of rain shower interruptions during last month and the relatively low prices that have been dictated by the reference prices of the London robusta coffee market, this harvest is due to become very active in the coming month of December. This shall potentially see significant volumes of new crop coffees coming to the warehouses in Ho Chi Minh City during December, which brings one to question how aggressive, shall be the internal market selling pressure by the end of next month. Likewise in January, with the Tet New Year holidays due to start during the second week of February ahead of which, it is traditional for farmers to sell new crop stocks to finance their holiday celebrations.

The second month arbitrage between the markets broadened yesterday, to register this at 47.76 usc/Lb., while this equates to a 40.39% 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 3,301 bags yesterday; to register these stocks at 1,860,301 bags. There was meanwhile a largerer in volume 4,519 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,945 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decline by 1,167 bags on Monday 16th. November; to see these stocks registered at 3,335,500 bags on the day.

The commodity markets were mixed in trade again yesterday, but with the overall commodity index remaining on the back foot and taking only a near to steady track for the day. The New York arabica Coffee Cotton and Soybean markets had a day of modest buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Copper, Orange Juice, Wheat, Corn, 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 0.63% lower to see this Index registered at 381.67. The day starts with the U.S. Dollar steady in early trade and trading at 1.520 to Sterling and 1.064 to the Euro, while North Sea Oil is steady in early trade and is selling at 41.10 per barrel.

The London and New York markets started the day yesterday with a degree of buoyancy, to see both markets take a positive track through to the afternoon trade. As the afternoon progressed however and with volumes starting to build, the New York market lost its support and slipped back to trade either side of par and with the London market following suit to likewise trade either side of par. The New York market did however recover, while the London market remained south of par and started to extend its losses, but to recover most of these later in the day in line with some added buoyancy for the New York market which faltered late in the day and to post only very modest gains by the close. The London market continued to end the day on a modestly negative note and with 40% of the earlier losses of the day intact, while the New York market ended the day on a steady note and with only 3.1% of the earlier gains of the day intact. This overall soft close and with the charts remaining negative in nature, is unlikely to inspire little better than a hesitantly steady start for early trade today against the prices set yesterday, as follows:

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

NOV 1524 – 12                                          DEC    114.25 – 0.10
JAN 1554 – 6                                            MAR    118.25 + 0.05
MAR 1573 – 2                                          MAY    120.45 + 0.05
MAY 1594 – 2                                            JUL    122.60 + 0.15
JUL 1614 – 2                                              SEP     124.55 + 0.15
SEP 1634 – 1                                             DEC     127.50 + 0.20
NOV 1655 unch                                       MAR     130.40 + 0.20
JAN 1673 + 2                                           MAY     132.35 + 0.15
MAR 1692 + 3                                           JUL      134.30 + 0.20
MAY 1719 + 10                                         SEP      136.10 + 0.20