Coffee Market Report December 29 2018

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market increase their net short sold position within the market by 21.65% during the week of trade leading up to Monday 24th. December; to register a short-sold position of 25,613 Lots on the day.  This net short position which is the equivalent of 4,268,833 bags has most likely been little changed to perhaps marginally reduced, following the period of mixed but overall more positive trade that has since followed. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 31.65 usc/Lb., while this equates to 31.34% 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 775 bags yesterday; to register these stocks at 2,461,114 bags.  There was meanwhile a larger in number 50,442 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,938 bags.

The commodity markets had a mixed day yesterday, to see the overall macro commodity index taking something of a sideways track for most of the day.  The Oil, Sugar, Cocoa, London robusta Coffee and Gold markets ended the day on a positive note, while the New York arabica Coffee ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% lower; to see this index registered at 392.68.   The day starts with the U.S. Dollar steady and trading at 1.270 to Sterling, at 1.144 to the Euro and with the dollar buying 3.880 Brazilian Real. 

The London and New York markets started the day yesterday with modest buoyancy and taking a modest positive track, into the early afternoon trade.  As the afternoon progressed the London market fell back a bit in value but maintained a positive track, while the New York market dropped pack to trade around par.   With the New York market coming under further pressure in late trade, to end the day on a softer note.  

The London market ended the day on a very positive note and with the last trade for the active March contract reflecting the holding of 87.5% of the earlier gains of the day, while the New York market ended the day on a soft note and with the last trade for the active March contract reflecting the holding on to 55.6% of the earlier losses of the day. 

This mixed close provides little in the way of direction for the markets in the coming week, with many players still on holiday well into the week.   Thus, one would guess and with nothing in the way of striking new fundamental news in play, that the markets might well be hesitant and erratic in nature for the coming week.   Against the prices of yesterday’s trade. 

Lacking the Settlement Prices for the London and New York markets, we have quoted the changes in value for these markets in terms of the Last traded prices, relative to the settlement prices of Thursday 27th. December.   With the last three months of the London market having not experienced any trades during the day, marked as unchanged. 

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

JAN    1499 + 12                                             MAR   101.00 – 0.75

MAR   1529 + 21                                             MAY   104.25 – 0.65

MAY   1547 + 21                                              JUL    106.85 – 0.90

JUL    1563 + 22                                              SEP    109.85 – 0.70

SEP    1581 + 21                                              DEC   113.50 – 0.80

NOV   1599 + 19                                              MAR   116.95 – 1.15

JAN    1608 + 12                                              MAY   120.85 + 0.30

MAR   1630 unch                                             JUL    123.20 + 0.30

MAY   1653 unch                                             SEP    125.45 + 0.30

JUL    1670 unch                                             DEC    128.00 – 0.25