Coffee Market Report February 19 2019

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 8.21% over the week of trade leading up to Tuesday 22nd. January; to register a new net short sold position of 57,009 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.23%, to register a net long position of 40,936 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 9.11%; to register a new net short sold position of 61,650 Lots. This net short-sold position which is the equivalent of 17,447,502 bags has most likely been further increased, following the period of mixed but overall softer trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

These figures are though almost a month old and with the figures for the 29th. July due to be announced late today, which shall be followed on Friday, with the figures as at the 5th. February.  However, with the prevailing soft nature of the market at present, the perception is that the speculative and fund sectors of the market remain significantly short sold and one might even guess, somewhat over sold at present.   A factor along with some degree of price resistance and lacklustre price fixations selling out of many major arabica coffee producers, that could inspire some degree of modest support for the New York market. 

One would speculate though that the short-term upside for the market is also limited, as any reasonable gains in value and with substantial volumes of unsold arabica coffees hanging over the market, are likely to bring producer selling back into play.  Thus, making one think that unless there is some presently unforeseen climate threatening news coming to the fore, that the coffee markets are due to remain within the present trading range for the coming couple of months. 

The May to May contracts arbitrage between the London and New York markets remained unchanged yesterday, to register this at 31.12 usc/Lb., while this equates to 30.61% 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 4,671 bags yesterday; to register these stocks at 2,482,112 bags.  There was meanwhile a larger in number 9,455 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,455 bags. 

Many commodity markets were closed yesterday, for the Presidents Day holiday in the U.S.A., but with most of the few that were trading ending the day on a positive note.   This included the Oil, Natural Gas, Copper, Gold and Silver markets, while the London robusta Coffee market ended the day on a steady note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets cannot be calculated since the close on Friday; to see this index unchanged and registered at 401.93.   The day starts with the U.S. Dollar showing some degree of renewed muscle and trading at 1.290 to Sterling, at 1.129 to the Euro and with the US Dollar buying 3.733 Brazilian Real. 

The London market trading solo yesterday started the day trading close to par and holding this near to steady stance into the early afternoon trade, when some degree of pressure started to impact and to force the market into modest negative territory.    The market did though manage to bounce back from the lows and return to trade around par and to take steady sideways track, towards a steady close for the day. 

The London market ended the day unchanged in value, but with the U.S. dollar showing a degree of early buoyancy, and the Brazil Real a little weaker, it might bring to the fore some volumes of selling.  This to possibly set both markets for only a near to steady start for early trade today, against the prices set in New York on Friday and in London yesterday, as follows: 

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

MAR   1529 unch                                          MAR    97.95 + 0.10

MAY   1555 unch                                          MAY   101.65 + 0.20

JUL    1564 – 1                                               JUL   104.30 + 0.25

SEP    1580 – 1                                              SEP   107.00 + 0.25

NOV   1598 – 1                                              DEC   110.80 + 0.30

JAN    1615 – 2                                             MAR   114.55 + 0.25

MAR   1632 – 5                                             MAY   117.00 + 0.30

MAY   1652 – 5                                              JUL    119.25 + 0.25

JUL    1668 – 5                                              SEP    121.40 + 0.20

SEP    1685 – 5                                              DEC   124.55 + 0.20