Coffee Market Report November 28 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 4.01% over the week of trade leading up to Tuesday 20th. November; to register a new net short sold position of 26,261 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.74%, to register a net long position of 44,062 Lots on the day. 

This follows the report that the Non-Commercial Speculative sector of this market decreased their net short sold position within the market by 8.03% over the week of trade leading up to Tuesday 20th. November; to register a new net short sold position of 38,825 Lots.   But following the period of mixed but overall more negative trade that has since followed, these short positions have most likely been modestly increased again. 

The respected analysts Allied Market Research are reported to have foreseen that the growing single serve coffee pod and capsule market in China is due to increase by over 185%, over the next seven years.  This forecast that is within the body of their overall Asia-Pacific Coffee Pod and Capsule Market Report, has the overall regional growth for Pods and Capsules over the same period at a more modest over 149% growth, but it is nevertheless and impressive growth factor. 

This report tends to underpin the vibrant coffee market that is developing in China as does the fact that the recent Hainan International Coffee and Beverages Expo have coffee participation taking a prominent position, within the host of attendees and exhibitors.   With 155 coffee companies from 28 different countries, reported to have exhibited within the expo.   Indicating that the coffee shop culture which is assisting to inspire a general coffee culture in most Asian countries, is due to sharply increase Chinese coffee consumption levels and demand and likewise, that of Asia in general. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 38.59 usc/Lb., while this equates to 34.06% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 480 bags yesterday; to register these stocks at 2,455,078 bags.  There was meanwhile a larger in number 13,384 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,547 bags. 

The commodity markets encountered further dollar buoyancy yesterday, to see a number of markets under pressure and to influence a marginally softer track for the overall macro commodity index for the day.   The Oil, Cocoa, Coffee, Corn and Soybean markets ended the day on a positive note and the Natural Gas, Sugar, Cotton, Copper, Orange Juice, Wheat, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3% lower; to see this index registered at 403.20.   The day starts with the U.S. Dollar steady and trading at 1.275 to Sterling, at 1.129 to the Euro and with the dollar buying 3.875 Brazilian Real. 

The London market started the day yesterday trading in negative territory and the New York trading around par, but with the Brazil Real starting to add some degree of muscle the New York market soon moved up into positive territory and to see the markets taking a mixed stance, into the early afternoon trade.   As the afternoon progressed and with the New York market remaining in positive territory, the London market recovered to trade around par and followed by buy stops coming into play to trigger a modest rally within the New York market and a move by the London market into modest positive territory.   The New York market did however hit something of ceiling and shed some of its gains of the day, in late trade. 

The London market ended the day on a positive note and with 70% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 70.4% of the earlier gains of the day intact.   The recovery in the New York market being related to only the sentiment that comes with some stability for the Brazil Real does not with the prevailing bearish fundamentals for the markets indicate any reason for significant gains in value, which would make one think that the markets are due for only a hesitant near to steady start for early trade today.   Against the prices set yesterday, as follows: 

LONDON ROBUSTA US$/MT                       NEW YORK ARABICA USc/Lb.

                                                                        DEC    109.50 + 2.50

JAN    1645 + 8                                               MAR   113.30 + 2.50

MAR   1647 + 7                                               MAY   116.15 + 2.50

MAY   1659 + 7                                                JUL    118.75 + 2.45

JUL    1671 + 7                                                SEP    121.35 + 2.40

SEP    1683 + 6                                                DEC   124.95 + 2.35

NOV   1696 + 7                                                MAR   128.50 + 2.30

JAN    1710 + 8                                                MAY   130.90 + 2.30

MAR   1724 + 8                                                JUL    133.25 + 2.30

MAY   1739 + 3                                                SEP    135.40 + 2.30

JUL    1751 unch                                             DEC    138.25 + 2.30