Coffee Market Report April 16 2018

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 6.88% during the week of trade leading up to Tuesday 10th. April; to register a net short sold position of 57,444 Lots on the day. This net short-sold position which is the equivalent of 16,285,119 bags has most likely been little changed, following the period of mixed but overall sideways 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 short sold position within this market by 17.92% during the week of trade leading up to Tuesday 10th. April; to register a net short sold position of 17,164 Lots on the day.  This net short sold position which is the equivalent of 2,860,667 bags is probably little changed, following the period of mixed but overall sideways trade, which has since followed. 

The markets ended last week devoid of any striking fundamental news and remain under pressure from the perception of rising coffee supply due for the second half of the year, with the prospects for a significantly larger new Brazil coffee crop.  As are the markets presently looking to a total lack of threatening weather forecasts for any of the main coffee districts, which adds to the prevailing lacklustre and soft nature of the coffee markets. 

The July 2018 to July 2018 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.76 usc/Lb., while this equates to 34.11% 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 625 bags on Friday; to register these stocks at 1,956,131 bags.  There were meanwhile a larger in number 2,500 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 86,582 bags. 

The commodity markets were mixed but wish some assistance from the marginally softer U.S. dollar there were many markets showing some degree of buoyancy on Friday, to see the overall macro commodity index taking a modestly positive track for the day.  The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy and the London robusta Coffee market was steady for the day, while the New York arabica Coffee, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.18% higher; to see this index registered at 427.87.  The day starts with the U.S. Dollar steady and trading at 1.425 to Sterling, at 1.233 to the Euro and with the dollar buying 3.425 Brazilian Real, while North Sea Oil is steady and is selling at US$ 72.60 per barrel. 

The London market started the day on Friday with a degree of buoyancy, while the New York market started the day trading hesitantly close to par and with the markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed the London market maintained its buoyancy and the New York market remained close to par, but with the New York market starting to come under pressure and to slip back into negative territory for late trade, while the London market lost its buoyancy and to head towards only a hesitantly steady close for the day.  

The London market ended the day on steady note and with the second contract unchanged for the day, while the New York market ended the day on a negative note and with 62.5% of the earlier losses of the day intact.  This close does little to inspire and one might expect to see little better than a steady start due for early trade today against the prices set on Friday, as follows: 

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

MAY   1713 + 2                                               MAY   117.30 – 0.60

JUL    1736 unch                                            JUL    119.50 – 0.50 

SEP    1726 – 2                                               SEP    121.55 – 0.45

NOV   1728 – 2                                               DEC    124.90 – 0.40

JAN    1730 – 2                                               MAR   128.40 – 0.35

MAR   1740 – 1                                               MAY   130.75 – 0.35

MAY   1752 – 2                                                JUL    132.90 – 0.30

JUL    1766 – 2                                                SEP    134.80 – 0.25

SEP    1779 – 2                                                DEC   137.60 – 0.15

NOV   1784 – 2                                                MAR   140.35 – 0.15