Coffee Market Report July 10 2018

The latest Commitment of Traders report from the New York arabica coffee market; which report was delayed due to the short trading week and the Independence Day holiday in the USA last week; has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 5.89% over the week of trade leading up to Tuesday 3rd July; to register a new record net short sold position of 73,139 Lots. This net short-sold position which is the equivalent of 20,734,582 bags has most likely been narrowly trimmed, 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 narrowed yesterday, to register this at 38.17 usc/Lb., while this equates to 33.17% 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 1,183 bags yesterday; to register these stocks at 2,045,807 bags. There was similarly an increase of 10,930 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,303 bags.

The commodity markets had a mixed day yesterday, subsequent to news of Brexit uncertainty and politically disruptive signals coming from Britain. The tariff dispute between leading economies US and China continues to simmer while the US Dollar took a softer track on the day. It was a firm day for the Oil markets, Coffee, Cotton, Copper, Gold, Silver, Platinum and Palladium markets and a softer day for Cocoa, Corn, Sugar, Wheat and Orange Juice markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered a lower day by 0.3098% to close at 419.59. The day starts with the U.S. Dollar steady, trading at 1.323 to Sterling, at 1.174 to the Euro and with the Dollar buying 3.871 Brazilian Real, while North Sea Oil is near to steady in early trade and is selling at US$ 77.56 per barrel.

Following on from the past two sessions of speculatively driven volatility in the coffee markets, the performance yesterday was more measured. The day started in mildly softer territory in London and a brief upward move in New York which brought sellers in to absorb and a push below par, from which New York and London, struggled to recover during the morning session. Trade was comparatively thin and in narrow range to see a recovery in both markets back to par by midmorning and as the day progressed activity increased to assist a clamber back to positive territory toward the latter half of the session. The markets set the close above par and after a degree of buoyancy which maintained the positive track right to the finishing minutes of the day, to set the close in positive territory just off of the days’ highs, after a fair volume session, as follows:

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

JULY  1,780 + 43      JULY   112.20 + 0.95
SEPT 1,695 + 33      SEPT  115.05 + 0.95
NOV  1,681 + 26      DEC     118.50 + 0.95
JAN   1 ,680 + 22      MAR    122.10 + 1.00
MAR  1,686 + 18      MAY    124.50 + 1.00
MAY  1,697 + 16      JULY    126.85 + 1.00
JULY  1,709 + 14     SEPT  129.10 + 1.00
SEPT 1,721 + 14     DEC    132.35 + 0.90
NOV  1,733 + 14     MAR   135.65 + 0.90
JAN   1,744 + 14     MAY    137.65 + 0.85