Coffee Market Report July 04 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 16.3% over the week of trade leading up to Tuesday 27th. June; to register a new net short-sold position of 43,619 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.3%, to register a net long position of 32,812 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 18.92%, to register a net short sold position of 42,454 Lots.  This net short sold position which is the equivalent of 12,035,521 bags has most likely been marginally reduced, following the period of mixed but overall more positive trade, which has since followed. 

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 3.98% during the week of trade leading up to Tuesday 27th. June; to register a net long position of 20,700 Lots.  This net long position which is the equivalent of 3,450,000 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more positive trade that has since followed. 

The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of June were 34,000 bags or 21.45% lower than the same month last year, at a total of 124,516 bags.   This lower performance contributes to the countries cumulative coffee exports for the first nine months of the present October 2016 to September 2017 coffee year to being close to 16% lower than the same period in the previous coffee year, at a total of 831,440 bags. 

The National Coffee Institute in Honduras have reported that the countries coffee exports for the month of June were 405,210 bags or 71.37% higher than the same month last year, at a total of 972,969 bags.  There is however some confusion in terms of the countries cumulative coffee exports for the first nine months of the present October 2016 to September 2017 coffee year as if one takes in the month by month reports for the past nine months, it would indicate that this would be 6,482,247 bags.  However, and while still and impressive number, the National Coffee Institute has reported these cumulative exports for the first nine months of the present coffee year to be a more modest 5.9 million bags, which they say is 37.2% higher than the same period in the previous coffee year. 

The Trade Ministry in Brazil have reported that the countries coffee exports for the month of June were 159,238 bags or 7.71% lower than the same month last year, at a total of 1,905,101 bags.  This marginally reduced number in terms of the relatively soft prices within the New York market of late and with a smaller new arabica coffee crop due to impact, was to be expected and is perhaps in terms of these factors, marginally better than some would have forecasted.  

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 30.36 usc/Lb., while this equates to a 23.77% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,500 bags yesterday; to register these stocks at 1,513,782 bags.  There were meanwhile a larger in number 5,598 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 57,120 bags. 

The commodity markets with positive economic news coming to the fore from China, the U.S.A. and the Euro zone countries shrugged off the negative influences of a modest recovery for the U.S. dollar yesterday, to see many markets show some degree of buoyancy and the overall macro commodity index taking a positive track for the day.   The Oil, Sugar, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy and the London robusta Coffee market was steady, while the Natural Gas, Cotton, Copper, Gold and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.69%higher, to see this Index registered at 404.81.  The day starts with the U.S. Dollar steady and trading at 1.294 to Sterling and at 1.137 to the Euro, while North Sea Oil is steady and is selling at $ 48.90 per barrel. 

The coffee markets started the day yesterday with both markets attracting early buoyancy and with the New York market soon adding additional value and to see the markets enter the early afternoon trade with the London market taking a positive track, while the New York market continued to show impressive muscle.   As the afternoon progressed the London market slipped back to fall below par and with the New York market shedding some of its gains but while the London market continued to trade either side of par through to the close, the New York market added more muscle and shot up to new highs for the day, before falling back towards a nevertheless positive end to the day’s trade.  

The London market ended the day on a steady note and having recovered 83.3% of the earlier losses of the day, while the New York market ended the day on a positive note and with 52.6% of the earlier gains of the day intact.   This close tends to paint something of a positive technical picture for both markets but with the New York market off the field of play today while the Americans celebrate their Independence Day holiday today, one would expect to see little excitement due for the London market for early trade today, against the prices set yesterday, as follows: 

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

JUL    2167 + 9                                              JUL     125.85 + 1.80 

SEP    2146 – 3                                              SEP    127.70 + 2.00

NOV   2124 – 3                                               DEC   131.10 + 1.90

JAN    2095 unch                                          MAR   134.60 + 1.85

MAR   2082 + 1                                              MAY   136.90 + 1.80

MAY   2088 + 1                                              JUL    139.05 + 1.80

JUL    2104 unch                                          SEP    141.10 + 1.80

SEP    2113 – 2                                              DEC   144.00 + 1.85

NOV   2093 – 7                                              MAR   146.70 + 1.75

JAN    2100 – 7                                              MAY   148.30 + 1.70