Coffee Market Report April 02 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 increase their net short sold position within the market by 1.12% over the week of trade leading up to Tuesday 26th. March; to register a new net short sold position of 78,056 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.44%, to register a net long position of 35,265 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 1.15%; to register a new net short sold position of 75,799 Lots. This net short-sold position which is the equivalent of 21,488,681 bags has most likely been further increased, following the period of overall negative trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The Economy Ministry in Brazil have reported that the countries coffee exports for the month of March were 940,262 bags or 41.44% higher than the same month last year, at a total of 3,209,103 bags.   This surge in coffee exports they report, follows a similar good volume of coffee exports in February, which they report to have been 3,108,475 bags. 

The National Coffee Institute in Costa Rica ICAFE have reported that the countries coffee exports for the month of March were 0.3% higher than the same month last year, to total 151,154 bags.  While they report that the countries cumulative exports for the first six months of the present October 2018 to September 2019 coffee year are 7.3% lower than the same period in the previous coffee year, at a total of 423,173 bags. 

It was a dismal start to the week for the coffee producers yesterday, with the later in the day trade coming under speculative pressure and with the New York market hitting thirteen and quarter year lows.   The relatively substantial volumes of Brazil coffee exports and with the new Brazil crop soon to start being harvested, is seemingly having a further impact upon the already bearish sentiment.  

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 29.42 usc/Lb., while this equates to 31.1% 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 3,651 bags yesterday; to register these stocks at 2,494,003 bags.  There was meanwhile, a larger in number 5,575 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,575 bags. 

The commodity markets were mixed in trade yesterday but with many markets taking a positive track, to see the overall commodity index showing some degree of buoyancy for he day.  The Oil, Natural Gas, Sugar, Cocoa, Orange Juice, Wheat, Corn and Soybean markets ended the day on a positive note, while the Coffe, Cotton, Copper, 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 0.52% higher; to see this index registered at 407.28.   The day starts with the U.S. Dollar steady and trading at 1.308 to Sterling, at 1.121 to the Euro and with the US Dollar buying 3.852 Brazilian Real. 

The London and New York markets started the day yesterday trading close to par, with the London market showing some degree of erratic buoyancy, but with both markets remaining around par into the early afternoon trade.   As the afternoon progressed selling pressure started to come to the fore within both markets and with sell stops being triggered, both markets slipped deeper into negative territory and while the markets did manage to bounce off the lows, both markets remained with most of the losses of the day intact and through to a soft close. 

The London market ended the day on a very negative note and with 89.5% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 84.5%% of the earlier losses of the day intact.  This close does not paint a pretty picture for the charts and does not inspire confidence and with the probability of consumer industries stepping back to await new lows, it is unlikely that the markets are due much more than another slow and 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. 

MAY   1418 – 38                                            MAY     92.10 – 2.40

JUL    1437 – 34                                            JUL       94.60 – 2.45

SEP    1456 – 32                                            SEP      97.30 – 2.45

NOV   1474 – 31                                            DEC    101.15 – 2.40

JAN    1493 – 30                                            MAR   105.00 – 2.40

MAR   1513 – 27                                            MAY   107.50 – 2.35

MAY   1534 – 26                                            JUL     109.80 – 2.25

JUL    1555 – 25                                            SEP     112.00 – 2.20

SEP    1573 – 25                                            DEC    115.20 – 2.10

NOV   1591 – 25                                             MAR   118.45 – 2.00