Coffee Market Report April 23 2019

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 11.57% over the week of trade leading up to Tuesday 16th. April; to register a short-sold position of 36,521 Lots.  This net short sold position which is the equivalent of 6,086,833 bags has most likely been marginally increased, following the period of mixed but overall softer trade that has since followed. 

The coffee markets remain devoid of any striking supportive fundamental news for the present, with bearish sentiment continuing to be fuelled by the prospects of the pending new Brazil coffee crop, while many have in mind the weight of unsold coffee stocks that are still to come from the Central Americans and Vietnam.   These coffees over and above the new crop coffees that are due from Peru and the slightly delayed Mitaca crop from Colombia, which shall start to impact in the coming month. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 28.62 usc/Lb., while this equates to 30.82% 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 4,449 bags yesterday; to register these stocks at 2,478,758 bags.  There was meanwhile a larger in number 4,699 bags decrease to the number of bags ending grading for this exchange; to register these pending grading stocks at 3,198 bags. 

The London commodity markets were closed for the day yesterday, to leave the U.S. markets to trade solo for the day and with many markets taking a softer track, to see the overall macro commodity index losing some weight through the day.  The Oil markets remained buoyant and the New York arabica coffee market near to steady for the day, while the U.S Sugar and Cocoa markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower; to see this index registered at 406.10.   The day starts with the U.S. Dollar steady and trading at 1.299 to Sterling, at 1.125 to the Euro and with the US Dollar buying 3.935 Brazilian Real. 

The New York market started the day yesterday trading solo and around par, but with the market soon attracting support in thin trade, to move up into positive territory.   As the day progressed the New York market started to attract support and with buy stops being triggered to add more value, but the market soon hit a ceiling and came under pressure and to move back into negative territory but with support coming to the fore in late trade to limit the losses. 

The New York market ended the day on a near to steady note, having recovered 92.9% of the earlier losses of the day by the close.  This close and with the failure of the New York market to hold on to its earlier in the day gains of 2.35 usc/Lb. does not inspire confidence and one might expect to see only a hesitant near to steady start for the markets for early trade today, against the prices set in London on Thursday and in New York yesterday, as follows: 

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

MAY   1389 + 3                                              MAY     91.10 + 0.90

JUL    1416 + 4                                              JUL       92.85 – 0.05

SEP    1436 + 5                                              SEP      95.35 – 0.05

NOV   1456 + 4                                              DEC      99.10 – 0.15

JAN    1475 + 4                                              MAR   102.75 – 0.20

MAR   1495 + 3                                              MAY   105.05 – 0.30

MAY   1517 + 4                                              JUL     107.25 – 0.35

JUL    1538 + 5                                              SEP     109.40 – 0.40

SEP    1557 + 5                                              DEC    112.50 – 0.45

NOV   1571 + 5                                               MAR   115.60 – 0.50