Coffee Market Report July 16 2018

16th July, 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 increase their net short sold position within the market by 1.78% over the week of trade leading up to Tuesday 10th July; to register a new record net short sold position of 74,448 Lots. This net short-sold position which is the equivalent of 21,105,678 bags has most likely been marginally extended following the period of buoyant 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 3.04% during the week of trade leading up to Tuesday 10th July; to register a net short sold position of 36,735 Lots on the day. This net short sold position which is the equivalent of 6,122,500 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 narrowed on Friday, to register this at 34.33 usc/Lb., while this equates to 31.24% 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 4,105 bags yesterday; to register these stocks at 2,046,882 bags. There was an increase by 3,200 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,340 bags.

The commodity markets had a mixed, overall lower day on Friday, the latest round of a tariff dispute between USA and China sidelined for the day and the firmer US Dollar flattening out as the day progressed. It was a positive day for Oil, Cocoa, Wheat and Orange Juice, with the rest of the board in softer territory, Coffee, Cotton, Copper, Corn Soybean, Sugar, Gold, Silver, Platinum and Palladium markets, all lower on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered a loss on the day, by 0.2946% to close at 411.39. The day starts with the U.S. Dollar steady, trading at 1.324 to Sterling, at 1.169 to the Euro and with the Dollar buying 3.849 Brazilian Real, while North Sea Oil is steady in early trade and is selling at US$ 73.54 per barrel.

The coffee markets started the day on a mildly softer note on Friday, New York narrowly negative and rangebound for the better part of the morning. The London market held similarly steady in negative territory turning softer as the day progressed and an attempt to push levels back to par in the late afternoon session led to a close in this market within middle of the day’s trading range. The overall bearish macro for commodities on Friday, as well as the change in fortunes for the Greenback, weighed in on the arabica market and the afternoon session in New York saw a return to volume and speculative selling activity, with volume building and stops triggered along the way. There was a degree of recovery from the lows posted in New York within the last hour of the day and a buoyant finish, after more than half of the days’ volume posted in the last few hours of the session. Thus, the coffee markets finished the day within the middle of the days trading range in London and a buoyant recovery from the lows in New York, in negative territory on the day, to set the close as follows:

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

JULY   1,766 - 14    JULY 107.05 - 1.65
SEPT  1,666 - 15    SEPT 109.90 - 1.65
NOV   1,653 - 13     DEC 113.40 - 1.70
JAN    1,652 - 13     MAR 117.00 - 1.70
MAR   1,661 - 13     MAY 119.45 - 1.70
MAY   1,672 - 14     JULY 121.90 - 1.65
JULY   1,687 - 13    SEPT 124.20 - 1.65
SEPT  1,700 - 12    DEC 127.55 - 1.65
NOV   1,712 - 12    MAR 130.85 - 1.65
JAN    1,723 - 12    MAY 132.90 - 1.70