Coffee Market Report April 16 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 7.94% over the week of trade leading up to Tuesday 9th. April; to register a new net short sold position of 74,110 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.03%, to register a net long position of 35,516 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 7.96%; to register a new net short sold position of 71,151 Lots. This net short-sold position which is the equivalent of 20,170,993 bags has most likely been further increased, following the period of mixed but overall more negative trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 154,785 bags or 2.47% during the month of March, to register these stocks at 6,110,111 bags at the end of the month.   The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 570,000 bags per week, would conservatively have been at least 1.1 million bags. 

Suggesting that if one is to consider the additional unreported stocks the end month stocks, this would equate to more than twelve weeks of roasting activity, which most would consider to be a very safe reserve.    Especially so ahead of the further deliveries due from large new Mexican and Central American crop and the new Peru crop, which are coming in over and above the steady deliveries from Colombia, Brazil and Vietnam.  Albeit that with price resistance prevalent within many producer countries, there is presently lacklustre export activity from many producers. 

The Colombian government who had earlier committed to contribute the equivalent of 50 million U.S. dollars to support struggling coffee farmers, have announced that they shall contribute the equivalent of a further 32 million U.S. dollars to their coffee farmers.  This finance in the form of farm subsides and to further assist to the ongoing replacement of aged coffee trees upon the farms, with new higher yielding and disease resistance varieties. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 28.67 usc/Lb., while this equates to 30.53% 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 333 bags yesterday; to register these stocks at 2,493,453 bags.  There was meanwhile, a larger in number 2,878 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,019 bags. 

The commodity markets were mixed in trade yesterday but with many markets tending softer for the day, to see the overall commodity index maintaining a near to steady track for the day.  The Coffee, Orange Juice, Corn and Soybean markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, 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 0.03% lower; to see this index registered at 409.67.   The day starts with the U.S. Dollar steady and trading at 1.309 to Sterling, at 1.130 to the Euro and with the US Dollar buying 3.872 Brazilian Real. 

The London and New York markets started the day yesterday trading close to par and with the New York market soon attracting support and moving up into modest positive territory, to see the New York market taking a positive track into the early afternoon trade, while the London market remained near to par.   As the afternoon progressed the London market followed the New York market up into positive territory and to see both markets on a positive track, through to the close of the day’s trade. 

The London market ended the day on a very positive note and with 95.2% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 76% of the earlier gains of the day intact.  This close might inspire some degree of confidence and some follow through support, to set the markets for a steady start for early trade today, against the prices set yesterday, as follows: 

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

 

MAY   1410 + 23                                            MAY     91.40 + 1.00

JUL    1438 + 20                                            JUL       93.90 + 0.95

SEP    1457 + 16                                            SEP      96.40 + 0.85

NOV   1476 + 14                                            DEC    100.30 + 0.85

JAN    1495 + 14                                            MAR   104.10 + 0.85

MAR   1515 + 14                                            MAY   106.50 + 0.80

MAY   1537 + 14                                            JUL     108.80 + 0.85

JUL    1558 + 14                                            SEP     110.95 + 0.85

SEP    1578 + 14                                            DEC    114.10 + 0.85

NOV   1596 + 14                                             MAR   117.20 + 0.85