Coffee Market Report October 08 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within the market by 10.92% over the week of trade leading up to Tuesday 2nd October; to register a new net short sold position of 97,175 Lots.   This net short-sold position which is the equivalent of 27,548,681 bags has most likely been reduced further, following the positive correction for the market at the end of last week.

Brazil Real to US Dollar 2008 to 2018:

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed, to register this at 33.56 usc/Lb., while this equates to 30.81% 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 6,526 bags on Friday, to register these stocks at 2,412,036 bags.  There was an increase of 4,677 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,162 bags.

The commodity markets were mixed in trade on Friday, although many markets reflected a degree of buoyancy, as the US Dollar lost ground while Oil markets posted a steadier day.  It was a positive day for Cocoa, Coffee, Cotton, Wheat, Corn, Soybean, Sugar, Gold, Silver, Platinum and Palladium.  The losers on the day were Copper and Orange Juice.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.45% higher; to see this index registered at 413.75.  The day starts with the U.S. Dollar trading at 1.31 to Sterling, at 1.151 to the Euro.  The Brazilian Real is trading at 3.8364 to the US Dollar, while North Sea Oil is steady, selling at US$ 83.82 per barrel.

The London and New York started the day on Friday with modest buoyancy, London registered positive trade volumes at the outset with rollover activity out of the prompt month apparent.  New York had a comparatively slower start.  New York held on to positive territory in the morning, with incremental gains assisted by the weaker US Dollar, while London market levels oscillated around par, to slip back into negative territory briefly.  As the day progressed the continuation of a positive track in New York brought about speculative short covering and New York, assisted by the lack of participation from producer sellers against firm Brazil Real which has additionally gained ground against the US Dollar during election month in Brazil, New York touched the highs of the day around midsession. It seemed that the London coffee market was swept along for the ride, as renewed buying activity led to a boost in London and a quick gap higher to a new, higher range, where a degree of consolidation was seen in the last few moments of the day, at the highs of the day, on the close.  It was a hefty volume day for London, and a good volume day in New York, the close set in both markets in positive territory and near to the days high attained in both markets, on Friday, as follows:

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

NOV     1,655    +          39                   DEC     108.95  +         2.00
JAN     1,662    +          47                   MAR    112.40  +          2.00
MAR     1,672    +          47                   MAY     114.85  +        2.05
MAY     1,685    +          47                   JULY    117.20  +         2.00
JULY    1,699    +          47                   SEPT   119.55  +         2.05
SEPT  1,713    +          46                   DEC     122.90  +         2.10 NOV     1,727    +          45                   MAR    126.50  +         2.45
JAN     1,741    +          45                   MAY     128.25  +         2.15
MAR     1,757    +          45                   JULY    130.05  +        2.25
MAY     1,769    +          45                   SEPT   131.80  +         2.35