Coffee Market Report August 01 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 26.27% over the week of trade leading up to Tuesday 25th. July; to register a new net short-sold position of 21,765 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.09%, to register a net long position of 33,226 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 19,64%, to register a net short sold position of 24,703 Lots.  This net short sold position which is the equivalent of 7,003,191 bags has most likely been further reduced, following the period of more positive trade, which has since followed 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 2.68% during the week of trade leading up to Tuesday 25th. July; to register a net long position of 20,629 Lots.  This net long position which is the equivalent of 3,438,167 bags has most likely been little changed to perhaps marginally decreased again, following the period of mixed but overall more positive trade that has since followed. 

The Indonesia government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of July were 182,613 bags or 49.07% higher than the same month in the previous year, at a total of 554,798 bags.   This contributes to the cumulative Sumatran robusta coffee exports for the first ten months of the present October 2016 to September 2017 coffee year to being 613,810 bags or 24.07% higher than the same period in the previous coffee year, at a total of 3,163,651 bags. 

It has to be noted though that while robusta coffee exports for the present 2016/ 2017 coffee year from Sumatra are so far posting a significant increase over the volumes exported during the previous 2015/2016 coffee year, that this latter 2015 to 2016 coffee year registered 50.49% lower exports than the previous 2014/ 2015 coffee year.   However, with the new crop now coming in and forecasted to be a larger new crop, one can expect that the islands monthly export volumes shall continue to improve and that by October, one shall see a much-improved performance for the present 2016/2017 coffee year.   But unlikely to get close to matching the 5.3 million bags exported during the 2014/2015 coffee year.  

The International Coffee Organisation have reported that global coffee exports for the month of June were 5.7% higher than the same month last year, at a total of 10.44 million bags.    This they report has contributed to the cumulative global coffee exports for the first nine months of the present October 2016 to September 2017 coffee year to be 5.6% higher than the same period in the previous coffee year, at a total of 92.29 million bags.   These cumulative exports made up by a 63.08 to 36.92 ratio, of arabica and robusta coffees. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.86 usc/Lb., while this equates to a 32.82% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,942 bags yesterday; to register these stocks at 1,548,439 bags.  There were meanwhile a larger in number 6,764 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,359 bags. 

The commodity markets had a mixed day yesterday, to see the overall macro commodity index taking a marginally softer track for the day.   The Sugar, Cocoa, New York arabica Coffee, Cotton, Copper and Silver markets had a day of buoyancy, while the Oil, Natural Gas, London robusta Coffee, Orange Juice, Wheat, Corn, Soybean and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.16% lower, to see this Index registered at 410.13.  The day starts with the U.S. Dollar near to steady and trading at 1.320 to Sterling and at 1.181 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 52.35 per barrel. 

The London market started the day yesterday with modest buoyancy, while the New York market started the day marginally south of par but with the New York market soon recovering and with both markets taking a modest positive track into the early afternoon trade.   As the afternoon progressed the London market started top come under pressure and to head back into modest negative territory, while the New York market and with limited producer selling over the market started to attract support and to maintain a positive stance for the rest of the day. 

The London market ended the day on a marginally softer note and having recovered 72.7% of the earlier losses of the day, while the New York market ended the day on a positive note and with 90% of the earlier gains of the day intact.    This close tends to assist to paint a modestly positive picture for the New York market, but a somewhat uncertain picture for the London market and is likely to inspire a steady start for early trade today, against the prices set yesterday, as follows:  

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

SEP    2123 – 6                                              SEP    139.25 + 1.40

NOV   2114 – 3                                               DEC   142.75 + 1.35

JAN    2090 – 2                                              MAR   146.30 + 1.35

MAR   2074 – 3                                              MAY   148.55 + 1.35

MAY   2083 – 2                                               JUL    150.60 + 1.30

JUL    2100 – 1                                               SEP    152.65 + 1.35

SEP    2109 – 2                                               DEC   155.50 + 1.35

NOV   2119 – 5                                               MAR   158.25 + 1.40

JAN    2126 – 5                                               MAY   159.75 + 1.35

MAR   2126 unch                                             JUL   161.25 + 1.40