Coffee Market Report May 09 2017

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 42.44% over the week of trade leading up to Tuesday 2nd. May; to register a new net short-sold position of 12,491 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.12%, to register a net long position of 32,128 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 44.7%, to register a net short sold position of 12,654 Lots.  This net short sold position which is the equivalent of 3,587,353 bags and following the period of mixed but overall more positive trade that has since followed, has most likely been marginally reduced 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 14.29% during the week of trade leading up to Tuesday 2nd. May; to register a net long position of 24,264 Lots.  This net long position which is the equivalent of 4,044,000 bags has most likely been little changed, following the period of mixed but overall marginally positive trade that has since followed. 

The coffee markets are meanwhile devoid of any striking fundamental news items at present, as is the physical coffee trade lacklustre in nature and physical trade is having little impact upon the fortunes of the coffee terminal markets.   But the markets have stabilised for the present and are taking a somewhat sideways track, which is perhaps supportive for some degree of cautious confidence coming to the fore in the coming weeks. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 44.96 usc/Lb., while this equates to 32.84% price discount for the London robusta coffee market.  This still relatively low arbitrage, 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 be unchanged yesterday; to register these stocks at 1,413,116 bags.    There were meanwhile 6,140 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,195 bags. 

The commodity markets mixed in trade yesterday, but with many markets remaining on the back foot and the overall macro commodity index taking a sideways track for the day.   The breakfast commodities Sugar, Cocoa, Coffee and Orange Juice had a day of buoyancy and the Gold and Silver markets were steady, while the Oil, Natural Gas, Cotton, Copper, Wheat, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.18% higher, to see this Index registered at 405.59.  The day starts with the U.S. Dollar steady and trading at 1.294 to Sterling and at 1.092 to the Euro, while North Sea Oil is near to steady and is selling at $ 47.20 per barrel. 

The London market started the day yesterday with early buoyancy and the New York market trading close to par and with the markets retaining this stance, into the early afternoon trade.   As the afternoon progressed there seemed to be some degree of confidence coming into play and with both markets shrugging off some short spells of negative pressure, to take a positive track through to the close.  

The London market ended the day on a very positive note and with 96.2% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 85.7% of the earlier gains of the day intact.   This close and with the markets ending the day at the higher end of the day’s trading range that assists to paint a better technical picture for the markets, is likely to assist to buoy confidence and one might expect to see a follow through steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY     2002 + 25                                              MAY   134.55 + 1.45

JUL      2027 + 25                                              JUL    136.90 + 1.20

SEP      2045 + 26                                             SEP    139.20 + 1.20

NOV     2054 + 27                                              DEC   142.65 + 1.15

JAN      2058 + 28                                             MAR   146.10 + 1.10

MAR     2059 + 29                                             MAY   148.35 + 1.15

MAY     2060 + 30                                              JUL    150.40 + 1.20

JUL      2070 + 30                                              SEP    152.30 + 1.20

SEP      2078 + 30                                              DEC   154.70 + 1.15

NOV     2085 + 30                                              MAR   156.95 + 1.15