Coffee Market Report July 09 2018

9th July, 2018.

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 3.19% during the week of trade leading up to Tuesday 3rd July; to register a net short sold position of 35,648 Lots on the day. This net short sold position which is the equivalent of 5,941,333 bags has most likely been increased marginally, following the period of buoyant trade, which has since followed.

The September 2018 to September 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 38.71 usc/Lb., while this equates to 33.93% 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 19,877 bags yesterday; to register these stocks at 2,044,624 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,373 bags.

The commodity markets were mixed on Friday, speculative investor concerns over the implementation of tariffs between USA and China continued to influence sentiment, while the US Dollar lost ground against a basket of other currencies. It was a mixed day for the Oil markets and a positive finish for Coffee, Corn, Wheat, Soybean, Sugar, Copper, Cotton, Orange Juice, Silver and a softer day for Gold, Palladium and Platinum. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered an improvement of 0.8755% to close at 420.89. The day starts with the U.S. Dollar steady, trading at 1.329 to Sterling, at 1.178 to the Euro and with the Dollar buying 3.862 Brazilian Real, while North Sea Oil is near to steady in early trade and is selling at US$ 75.30 per barrel.

The London market opened the day on a marginally softer note on Friday, New York followed slightly above par but with both markets subjected to the weight of primarily speculative selling activity, to set a lower floor by midmorning. It was a choppy day for currencies and specifically influential to the coffee markets the Brazil Real to US Dollar. The Brazil Real started out the day at 3.9324, touched 3.9496, before firming to 3.8629 at close of business and the markets reflected this to a degree, as origin selling activity gradually withdrew, both markets took to positive territory. The reversal of fortunes in both markets triggered renewed confidence along with fresh buyer participation, the upward moves continued to build momentum in the latter end of the day in both markets, to set the close on a positive note with London settling on the high of the day and New York near to the high of the day, to see the close on Friday, on a buoyant note and in positive territory after a good volume day in both markets, and ahead of a local regional holiday in Brazil today, as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

JULY    1,737 + 34 JULY 111.25 + 4.95
SEPT   1,662 + 23 SEPT 114.10 + 4.95
NOV    1,655 + 21 DEC 117.55 + 4.95
JAN     1,658 + 20 MAR 121.10 + 4.95
MAR    1,668 + 19 MAY 123.50 + 4.90
MAY    1,681 + 17 JULY 125.85 + 4.85
JULY   1,695 + 18 SEPT 128.10 + 4.75
SEPT   1,707 + 17 DEC 131.45 + 4.70
NOV   1,719 + 16 MAR 134.75 + 4.60
JAN    1,730 + 16 MAY 136.80 + 4.55