Coffee Market Report May 01 2018

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 12.98% over the week of trade leading up to Tuesday 24th. April; to register a new net short sold position of 61,532 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 14.52%, to register a net long position of 35,294 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 16.21%, to register a net short sold position of 59,134 Lots.  This net short sold position which is the equivalent of 16,764,227 bags has most likely been further reduced, following the period of mixed by overall more positive trade that has since followed and likewise, that of the managed money fund sector of the market. 

Today is Labour Day or May Day for most of the major coffee producers globally and likewise, for many of the main stream consumer markets.  The London and New York terminal markets shall though be open for the day, but with many players off the field of play for the day, one cannot expect too much excitement for trade today. 

The July 2018 to July 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 43.15 usc/Lb., while this equates to 35.14% 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 525 bags yesterday; to register these stocks at 1,991,018 bags.  There were meanwhile a larger in number 2,693 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,664 bags. 

The commodity markets were mixed in trade yesterday but with buoyancy in many markets, to see the overall macro commodity index taking a modestly buoyant track for the day.  The U.S. Oil, Sugar, New York arabica Coffee, Copper, Orange Juice and Wheat markets had a day of buoyancy and the Natural Gas market was steady, while the Brent Oil, Cocoa, London robusta Coffee, Cotton, Corn Soybean, 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 0.28% higher; to see this index registered at 433.30.  The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.375 to Sterling, at 1.206 to the Euro and with the dollar buying 3.507 Brazilian Real, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 76.25 per barrel. 

The London market started the day yesterday trading with modest buoyancy, while the New York market started the day on a softer note and soon moving into negative territory, to see the markets maintaining this mixed stance into the early afternoon trade.   As the afternoon progressed the London market started to come under pressure and slipped back through par and moved into modest negative territory, while the New York market bounced back from its lows and moved back up into modest positive territory.   This set the markets for a mixed stance for the rest of the day’s trade and with the London and New York markets settling either side of par. 

The London market ended the day on a negative note and with 75% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 61.5% of the earlier gains of the day intact.  This close and with the markets ending the day relatively close to par provides little in the way direction and with so many players side-lined by today’s Labour Day holiday, one can expect little better than a steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY   1717 – 9                                               MAY   120.65 + 0.30

JUL    1756 – 6                                                JUL    122.80 + 0.40 

SEP    1742 – 4                                               SEP    124.95 + 0.50

NOV   1742 – 5                                               DEC    128.35 + 0.45

JAN    1744 – 5                                               MAR   131.80 + 0.40

MAR   1753 – 6                                               MAY   134.05 + 0.40

MAY   1764 – 7                                                JUL    136.10 + 0.35

JUL    1777 – 7                                                SEP    137.90 + 0.30

SEP    1789 – 7                                                DEC   140.50 + 0.25

NOV   1804 – 7                                                MAR   143.15 + 0.25