Coffee Market Report May 16 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 decrease their net short sold position within the market by 13.74% over the week of trade leading up to Tuesday 9th May; to register a new net short-sold position of 10,774 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 4.80%, to register a net long position of 33,672 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 17.2%, to register a net short sold position of 10,789 Lots.  This net short sold position which is the equivalent of 3,058,633 bags and following the period of mixed but overall more positive trade that has since followed, has most likely been little changed to perhaps marginally increased, following the mixed trade that has followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 200 Lots during the week of trade leading up to Tuesday 9th May; to register a net long position of 24,464 Lots.  This net long position which is the equivalent of 4,077,333 bags has most likely been little changed, following the period of mixed trade that has since followed.
The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 165,497 bags or 2.46% during the month of April, to register these stocks at 6,890,354 bags at the end of the month.   This is the record highest figure for the these stocks, since this data started being recorded and assessed in January 2002.   These stocks do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, would conservatively have been at least 1.1 million bags. If one is to consider the additional unreported stocks the end month stocks, this would equate to an estimate of 14 weeks of roasting activity, which may be considered a very safe reserve. 
The July to July contracts arbitrage between the London and New York markets held steady yesterday, to register this at 44.14 usc/Lb., while this equates to 33.07% 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 1,801 bags yesterday; to register these stocks at 1,432,431 bags.    There were meanwhile 6,178 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,650 bags.
The commodity markets had a buoyant day yesterday, as two leading oil producer nations, Saudi Arabia and Russia confirmed their intent to maintain the prevailing oil supply limits into 2018 to provide a boost to the oil markets on the day.  The US Dollar had a softer day against a basket of other major currencies.  The Oil markets were firmer on the day, as was it a positive day for Sugar, Cocoa, Cotton, Copper, Soybean, markets.  It was a steady day for Gold, and a positive finish for Silver and Platinum, although a softer day for Palladium, Coffee, Orange Juice, Wheat, and Corn, all lower on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.03% higher, to see this Index registered at 410.36.  The day starts with the U.S. Dollar steady and trading at 1.291 to Sterling and at 1.0994 to the Euro, while North Sea Oil is firmer in early trade and selling at $ 51.11 per barrel.
 
The London and New York markets started the day on a marginally firmer note yesterday, although short lived as both markets met with speculative seller activity as the morning progressed, to push both markets below the opening levels, with trade volumes relatively muted in London and in a tight range in New York.  With little in the way of fresh fundamental news to guide direction, the markets drifted lower toward the latter half of the day with underlying supportive buyer activity dwindling toward the end of the session, to see both markets post fresh lows as the trading day drew to a close, with London posting a close on the low of the day in this market and New York, marginally above the low of the day, after an overall restrained and quiet session for both markets, the close was set yesterday, as follows:
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAY     1941 – 25                                              MAY   131.25 – 1.35
JUL      1969 – 25                                              JUL    133.45 – 1.50
SEP      1989 – 24                                              SEP    135.80 – 1.50
NOV     1997 – 24                                              DEC    139.20 – 1.45
JAN      2000 – 24                                              MAR   142.65 – 1.40
MAR     1998 – 25                                              MAY   144.85 – 1.45
MAY     2001 – 25                                              JUL    146.95 – 1.45
JUL      2016 – 25                                              SEP    148.85 – 1.40
SEP      2024 – 25                                              DEC   151.30 – 1.40
NOV     2031 – 25                                              MAR   153.65 – 1.40