Coffee Market Report February 07 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the longer term in nature Index Fund sector of this market increase their net long position within the market by 3.06%, to register a net long position of 36,131 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by a nominal percent to register the net long position of 25,043 Lots.  This net long position which is the equivalent of 7,099,580 bags has most likely been further reduced, following the period of mixed but overall more negative trade which has since followed and likewise, that of the Managed Money fund sector of the market.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 1.40% during the week of trade leading up to Tuesday 31st January; to register a record high net long position of 46,399 Lots.  This net long position which is the equivalent of 7,733,166 bags has most likely been decreased further, following the period of mixed but overall softer trade that has since followed.
It has been reported in the press in Brazil that the countries Agricultural Ministry plans to meet with coffee farmer representatives and with representatives of the countries domestic coffee industry, to revisit the request from the local domestic coffee roaster industry for permission to allow the importation of robusta coffees.  These discussions are due to take place later today, while the coffee farmer representatives have yesterday voiced their concerns regarding the relatively low internal robusta stock estimates that have come to the fore via the Ministry, to request that these stocks be evaluated again, prior to making any decisions regarding the prospects of permitting other alternative robusta coffees to be imported into Brazil.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 47.62 usc/Lb., while this equates to 32.49% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,917 bags yesterday; to register these stocks at 1,310,870 bags.  The certified stocks reported a decrease of 6,959 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,657 bags.
The commodity markets had a mixed and generally softer day yesterday, as the leading in influence oil markets established a lower trend and the U. S. Dollar incrementally gained ground against a basket of other major currencies during the session.  It was a softer day for Oil, Cocoa, Coffee, Cotton, Orange Juice, Wheat and Corn, it was a fimrer day for Copper, Sugar and Soybean markets, a relatively flat close for Gold and a softer day for Silver, Platinum and Palladium markets all lower on the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3145% lower, to see this Index registered at 428.73.  The day starts with the U.S. Dollar trading at 1.246 to Sterling and steady at 1.07 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 54.72 per barrel.
 
The coffee markets started the day yesterday on a steady note in New York and mildly softer in London although early moves in both markets saw the markets recover back to positive territory, which in New York was met with speculative and fund liquidation pressure.  The day progressed into the midsession with a continuation of fund and speculative liquidation and both markets slipped into lower territory as the session moved into the afternoon.  The progressive slide was tapered to by the reappearance of new fund and speculative buying support which set the floor for the day and provided a degree of renewed confidence within both markets and a modest recovery toward the latter half of the day, the mixed overall sentiment within the commodity markets generally leant an influence to these markets as the day drew to a close and upward impetus dried up, to place market direction back into the hands of the sellers.  The London market slipped back towards the lows of the day to the closing bell while the New York market having registered a brief spurt of upward movement right at the end of the day again met with overhead selling and this market similarly set the close near to the days’ low, to see the close yesterday in a respectable volume day in New York and London, on a softer note in both markets, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2158 – 19                                             MAR   144.20 – 2.05
MAY     2181 – 16                                              MAY   146.55 – 2.15
JUL      2192 – 16                                              JUL    148.85 – 2.20
SEP      2197 – 15                                              SEP   151.20 – 2.15
NOV     2199 – 15                                              DEC   154.45 – 2.10
JAN      2198 – 15                                              MAR   157.45 – 2.00
MAR     2197 – 15                                              MAY   159.25 – 1.90
MAY     2199 – 15                                              JUL    160.75 – 1.90
JUL      2209 – 15                                              SEP    162.20 – 1.90
SEP      2219 – 15                                              DEC   164.25 – 2.05