Coffee Market Report May 30 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 9.12% during the week of trade leading up to Tuesday 23rd. May; to register a net long position of 18,894 Lots.  This net long position which is the equivalent of 3,149,000 bags has most likely been little changed, following the period of mixed but overall marginally positive trade that has since followed. 

With the month of May coming to a close and with the coffee export registrations for the month so far in hand, the Vietnam authorities are estimating that the countries coffee exports for the month of May shall be approximately 2 million bags.   This they say shall contribute to the countries cumulative coffee exports for the first five months of the year, to be 14% lower than the same period in the previous year, at approximately 11.8 million bags.   

Yesterday was a long weekend for the coffee markets as it was for most markets, with the U.S.A. markets closed for the Memorial Day long weekend, while the UK markets were closed for the Spring Bank Holiday.  As it was likewise a slow and lacklustre day for the global equity markets, with not only the USA and UK markets off the field of play, but also the Chinese market closed for the Tuen Ng Festival.   The latter is more commonly known globally, as the Dragon Boat Festival.    

Thus, for those who might have missed yesterday’s report, we can repeat below the arbitrage, New York certified stocks and the New York and London market figures below. 

The July to July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.73 usc/Lb., while this equates to 30.98% price discount for the London robusta coffee market.  This arbitrage may nevertheless become 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 7,523 bags on Friday; to register these stocks at 1,469,775 bags.  There were 4,630 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,191 bags. 

The day starts with the U.S. Dollar steady and trading at 1.282 to Sterling and at 1.112 to the Euro, while North Sea Oil firm is near to steady and is selling at $ 51.11 per barrel. 

There has been no striking news coming to the fore for the coffee markets since their close on Friday, but one might think that following the positive close on Friday and with the London market having retained 85.07% of the earlier gains of the day and the New York market 65.52% of the earlier gains of the day, that there might be some degree of caution and a follow through steady start for the markets in early trade today.   Against the prices set on Friday, as follows: 

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

MAY    1961 + 57

JUL     1991 + 57                                          JUL     131.20 + 1.90

SEP     2002 + 52                                          SEP    133.55 + 1.90

NOV    1997 + 46                                          DEC    137.05 + 1.85

JAN     1987 + 41                                          MAR   140.45 + 1.85

MAR    1981 + 41                                          MAY   142.65 + 1.90

MAY    1940 + 40                                          JUL    144.80 + 1.90

JUL     1995 + 36                                          SEP    146.75 + 1.90

SEP     2009 + 36                                          DEC   149.20 + 1.95

NOV    2016 + 36                                         MAR    151.60 + 2.00