Coffee Market Report December 11 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 10.61% during the week of trade leading up to Tuesday 5th. December; to register a net short sold position of 37,420 Lots on the day. This net short-sold position which is the equivalent of 10,608,404 bags has most likely been once again marginally increased, following the period of mixed but overall softer 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 increase their net short sold position within this market by 4.89% during the week of trade leading up to Tuesday 5th. December; to register a net short sold position of 21,208 Lots on the day.  This net short sold position which is the equivalent of 3,534,667 bags has most likely been little changed to perhaps marginally increased again, following a period of mixed but overall sideways trade, which has since followed. 

The Vietnam customs authorities announced on Friday that the country’s coffee exports for the month of November were marginally higher than their earlier forecast for exports for the month of 1.42 million bags, to total 1.67 million bags.     The coffee export volumes of mostly robusta coffees now expected to pick up further during this month of December and for the coming months, now that there is a good flow of new crop coffees starting to come to the market.  

The International Coffee Organisation have come to the fore with their latest report and while conceding that due to this years small Brazil crop that the overall South American coffee production shall be 3.1% lower for the present October 2017 to September 2018 coffee year, that with a 4.4% increase in Asian and Oceania production, a 4.3% increase in Mexican and Central American production and an 4.1% increase in African production, that global coffee production for the present coffee year can be expected to increase by 0.8% to total 158.69 million bags.  This report and with so far, a good recovery foreseen for the next Brazil 2018 crop and a crop that shall start to come to the fore well within this present coffee year, would be seen to be bearish to flat for market sentiment. 

The March 2018 to March 2018 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 43.67 usc/Lb., while this equates to 35.62% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday; to register these stocks at 1,937,643 bags.  There were meanwhile 5,610 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,201 bags. 

The commodity markets were mixed in trade on Friday, with the U.S. dollar continuing to show some muscle and dampening spirits within many markets, to see the overall macro commodity index takins something of a sideways track for the day.   The Oil, Natural Gas, Cocoa, London robusta Coffee, Copper, Corn and Silver markets had a day of buoyancy, while the Sugar, New York arabica Coffee, Cotton, Orange Juice, Wheat, 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 0.05% lower; to register this index at 407.23.   The day starts with the U.S. Dollar neat to steady and trading at 1.342 to Sterling and at 1.179 to the Euro, while North Sea Oil is steady and is selling at US$ 63.95 per barrel. 

The London and New York markets started the day yesterday on Friday marginally above par and with both markets adding some modest value, into the early afternoon trade.   As the afternoon progressed both markets tended to falter, but while the London market shrugged off the negative pressure and moved back into positive territory, the New York market and took a softer track through to the close. 

The London market ended the day on a positive note and with 80.9% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 30% of the earlier losses of the day intact.   This close continues to paint a negative picture for the New York charts, as does the Brazil Real trading at 3.29 to the dollar bring fears of active Brazil new crop arabica coffee price fixation selling pressure, which is likely to inspire little better than a hesitant steady start for early trade today, against the prices set on Friday, as follows: 

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

JAN    1750 + 20                                            DEC   120.60 – 0.25

MAR   1740 + 17                                            MAR   122.60 – 0.30

MAY   1747 + 15                                            MAY   124.80 – 0.35

JUL    1785 + 14                                            JUL     127.10 – 0.35 

SEP    1794 + 14                                            SEP    129.40 – 0.45

NOV   1804 + 15                                            DEC    132.80 – 0.45

JAN    1814 + 17                                            MAR   136.05 – 0.45

MAR   1824 + 17                                            MAY   138.55 – 0.40

MAY   1849 + 17                                            JUL    140.20 – 0.40

JUL    1881 + 17                                            SEP    142.20 – 0.35