Coffee Market Report May 02 2017

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 39.47% during the week of trade leading up to Tuesday 25th. April; to register a net long position of 28,311 Lots.  This net long position which is the equivalent of 4,718,500 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall more buoyant trade that has since followed. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 47.58 usc/Lb., while this equates to 35.02% price discount for the London robusta coffee market.  This still relatively low arbitrage which is likely to narrow today when the London market opens on most probably a firmer note, remains not such an attractive factor for the many price sensitive roast and ground 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 1,975 bags yesterday; to register these stocks at 1,410,133 bags.  There was meanwhile a smaller in number 1,680 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 12,195 bags. 

The commodity markets lacked the participation of the London based markets yesterday, but the overall macro U.S.A. commodity index taking a modestly negative track for the day.   The day starts with the U.S. Dollar tending softer and trading at 1.290 to Sterling and at 1.092 to the Euro, while North Sea Oil is tending softer and selling at $ 49.95 per barrel. 

The London market was closed yesterday for the International Labour Day Bank holiday, to leave the New York market to trade solo for a shortened day’s trade.  The New York market started trade with immediate follow through buoyancy and maintained a positive sideways track for some hours, before attracting further speculative and fund short covering support and adding some more value and with gains of 4 usc/Lb. for the day, but with selling pressure coming in to play in late trade to limit the gains of the day.  

The New York market ended the day on a positive note and with 61.2% of the gains of the day intact, which is likely to assist to inspire some degree of catch up buoyancy for the post long weekend London market for early trade today against the prices set on Friday below.   However, with a softer Brazil Real in play and trading at 3.175 to the dollar, there might be some degree of hesitancy and only a near to steady start for the New York market for early trade today against the prices set yesterday, as follows:  

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

MAY     1917 + 39                                             MAY   133.60 + 2.55

JUL      1946 + 36                                              JUL    135.85 + 2.45

SEP      1960 + 35                                             SEP    138.15 + 2.40

NOV     1967 + 35                                              DEC   141.70 + 2.35

JAN      1969 + 33                                             MAR   145.15 + 2.40

MAR     1971 + 33                                             MAY   147.35 + 2.40

MAY     1976 + 33                                              JUL    149.40 + 2.40

JUL      1983 + 33                                              SEP    151.35 + 2.40

SEP      1991 + 33                                              DEC   153.70 + 2.40

NOV     1998 + 33                                              MAR   156.00 + 2.40