Coffee Market Report October 23 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 decrease their net short sold position within the market by 30.11% over the week of trade leading up to Tuesday 16th. October; to register a new net short sold position of 54,378 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.17%, to register a net long position of 47,407 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 21.05%, to register a net short sold position of 68,110 Lots. This net short sold position which is the equivalent of 19,308,883 bags has most likely been further reduced, following the period of overall positive trade that has since followed and likewise, that of the managed money fund sector of the market.

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 39.59 usc/Lb., while this equates to 33.65% 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 3,542 bags on Friday; to register these stocks at 2,430,050 bags. The bags pending grading for the exchange, registered a decrease by 6,759 bags pending grading for this exchange; to register these pending grading stocks at 69,897 bags.

The commodity markets experienced a mixed day yesterday, the news of China’s stated commitment to provide support to industries affected by the recent trade tariff imposition, provided a boost in certain sectors, while separately the Euro slipped and the US Dollar gained ground on the day. It was a steady day for the Oil markets, and a positive close for Cocoa, Cotton, Corn, Soybean, Copper and Palladium markets. It was a lower day for Sugar, Coffee, Orange Juice, Wheat, Gold, Silver and Platinum markets on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1354% lower; to see this index registered at 415.71. The day starts with the U.S. Dollar steady and trading at 1.295 to Sterling, at 1.145 to the Euro and with the Dollar buying 3.684 Brazilian Real, while North Sea Oil is steady and is selling at US$ 80.33 per barrel.

The London market opened the day on a mildly positive note yesterday, while New York took a softer track at the outset. By midsession both markets had lost further ground, trading on a softer note in comparatively light volume. The later day session saw a degree of buoyancy return as the Brazil Real posted a firmer day and origin selling activity withdrew from the floor and both markets moved upward, towards par, to recover most of the losses incurred. The volumes in both markets still relatively subdued however and in a somewhat technically driven day, selling pressure returned to register a further push southward and as the session drew to a close, the markets took a softer turn once more, to break through the previous floor and set lower levels on the close. The markets finished the day yesterday on a softer note and set the close, after a fair volume day, slightly above the days’ low registered in London and on the days’ lows in New York, as follows:

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

NOV     1,696 - 21             DEC  117.65 - 4.45
JAN      1,721 - 18             MAR  121.45 - 4.45
MAR     1,737 - 17             MAY  124.00 - 4.40
MAY     1,752 - 17             JULY  126.35 - 4.40
JULY    1,766 - 17             SEPT 128.60 - 4.40
SEPT   1,780 - 17             DEC   131.95 - 4.40
NOV     1,794 - 17             MAR  135.20 - 4.40
JAN     1,807 - 16             MAY   1 37.15 - 4.40
MAR    1,821 - 16             JULY  138.85 - 4.35
MAY     1,833 - 16            SEPT  140.50 - 4.35