Coffee Market Report September 25 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 6.30% over the week of trade leading up to Tuesday 18th. September; to register a new net short sold position of 109,159 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market marginally, to register a net long position of 45,296 Lots on the day.

Over the same week the Non-Commercial Speculative sector of this market increased their net short sold position within the market by 7.12%, to register a net short sold position of 113,412 Lots. This net short-sold position which is the equivalent of 32,151,799 bags has most likely been reduced a bit, following the period of overall positive trade, which has since followed.

The European Coffee Federation ECF have issued a lower correction to the report of port warehouse coffee stocks held within reporting warehouses in the ports in Belgium, Germany, France and Italy to have decreased by 27,750 bags during the month of July, to register these stocks at the end of the month at 11,489,533 bags.

The European Coffee Federation ECF have further reported the port warehouse stocks held within European reporting warehouses to have registered an increase on the month of 2.30%, to register these stocks at the end of August, at 11,758,050 bags. These stocks do not however include the unreported stocks from the industry on site inventory stocks, the transit bulk container stocks and stocks being held within non-reporting warehouses throughout Western and Eastern Europe.

The November 2018 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 29.87 usc/Lb., while this equates to 30.33% 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 6,906 bags on Friday; to register these stocks at 2,370,289 bags. There was a decrease by 9,698 bags in the number of bags pending grading for this exchange; to register these pending grading stocks at 102,866 bags.

The commodity markets were mixed in trade yesterday, the trade tensions between China and USA sparked investor concerns and ahead, the start of the two-day US Federal Reserve meeting, where speculation heightens around the subject of potential for further interest rate hikes to come. It was a positive day for the Oil markets, Cocoa, Wheat, Corn and Silver markets, whereas it was a flatter day for Gold and a softer day for Coffee, Sugar, Copper, Cotton, Orange Juice Soybean, Platinum, and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1481 higher; to see this index registered at 405.47. The day starts with the U.S. Dollar steady and trading at 1.3102 to Sterling, at 1.174 to the Euro and the US Dollar buying 4.09 Brazilian Real, while North Sea Oil is firm in early trade and selling at US$ 81.53 per barrel.

The coffee markets started the day yesterday on a mildly softer note in slow opening volumes and in a narrow range as the morning progressed. The sentiment in London turned positive on the front months with positive moves pushing this market higher into the afternoon session, to see this market finish the day close to the high attained. The New York arabica market remained steady at just below par which turned softer as the day progressed. The absence of fresh fundamental news to guide direction saw this market drift lower, to break through chart triggering levels toward the very end of the day and a close in this market, on the low of the days’ trade. The markets finish after what might be considered a light to medium volume day, on a positive note in London and a softer note in New York, to set the close yesterday, as follows:

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

SEPT     1,596 Unch
NOV      1,513 + 24          DEC 98.50 - 1.40
JAN       1,507 + 14          MAR 101.90 - 1.40
MAR      1,521 + 10          MAY 104.35 - 1.40
MAY       1,534 + 6           JULY 106.75 - 1.35
JULY      1,546 + 1           SEPT 109.10 - 1.40
SEPT     1,561 - 1            DEC 112.55 - 1.35
NOV      1,574  - 2            MAR 115.90 - 1.35
JAN       1,588  - 2            MAY 117.95 - 1.35
MAR      1,605 - 2            JULY 119.75 - 1.40