Coffee Market Report May 15 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within the market by 17.2% during the week of trade leading up to Tuesday 9th May; to register a net short sold position of 10,789 Lots on the day. This net short-sold position which is the equivalent of 3,058,633 bags has most likely been little changed to perhaps marginally increased, following the mixed but overall positive trade that has since followed.

The July to July contracts arbitrage between the London and New York markets widened on Friday, to register this at 44.50 usc/Lb., while this equates to 32.98% 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 increase by 3,520 bags on Friday; to register these stocks at 1,430,630 bags.    There were meanwhile 3,715 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,472 bags.

The commodity markets were mixed on Friday, with lower than anticipated U.S. retail sales data released on Friday in mixed reaction.  The US Dollar lost some ground on the day, against a basket of other major currencies.  The Oil markets had a steady to lower day, and a softer day for Sugar, Wheat, Soybean and Platinum markets, whereas it was a more positive day for Cocoa, Cotton, Copper, Orange Juice, Corn, Gold, Silver and Palladium markets.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.74% higher, to see this Index registered at 410.23.  The day starts with the U.S. Dollar steady and trading at 1.292 to Sterling and at 1.0938 to the Euro, while North Sea Oil is firmer in early trade and selling at $ 50.30 per barrel.
The coffee markets opened the day on Friday on a marginally softer note in modest trade volumes.   It was a relatively quiet day overall for London and a fair volume day in New York as the morning session moved into positive territory.  The day progressed with both London and New York continuing on a positive track, although within a narrow range for New York and a degree of buoyancy leant support from the softer US Dollar on the day.  Both markets shed some of the gains made, toward the latter half of the session to set the close on Friday, in positive territory but off the days’ highs and nearer to the middle of the day trading range in New York, and closer to the top of the days’ range in London, as follows:

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

MAY     1966 + 15                                             MAY   132.60 + 0.70
JUL      1994 + 10                                             JUL    134.95 + 0.70
SEP      2013 + 10                                             SEP    137.30 + 0.65
NOV     2021 + 10                                             DEC    140.65 + 0.70
JAN      2024 + 10                                             MAR   144.05 + 0.65
MAR     2023 +   9                                             MAY   146.30 + 0.70
MAY     2026 +   9                                             JUL    148.40 + 0.80
JUL      2041 +   9                                             SEP    150.25 + 0.70
SEP      2049 +   9                                             DEC   152.70 + 0.70
NOV     2047 +   9                                             MAR   155.05 + 0.70