Coffee Market Report May 06 2019

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within this market by 6.59%; over the week of trade leading up to Tuesday 30th. April; to register a new net short sold position of 70.845 Lots.  This net short-sold position which is the equivalent of 20,084,244 bags has most likely been increased again, following the period of mixed but overall negative trade that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector of this market decrease their net short sold position within the market by 1.21% over the week of trade leading up to Tuesday 30th. April; to register a short-sold position of 39,071 Lots.  This net short sold position which is the equivalent of 6,511,833 bags has most likely been further increased, following the period of mixed but overall softer trade that has since followed. 

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of April was 157,000 bags or 17.96% higher than the same month last year, at a total of 1,031,000 bags.   This has contributed to the countries cumulative production for the first seven months of the present October 2018 to September 2019 coffee year to be 165,000 bags or 2.02% lower than the same period in the previous coffee year, at a total of 8,016,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of April were 47,000 bags or 5.11% higher than the same month last year, at a total of 967,000 bags.   This has contributed to the country’s cumulative coffee exports for the first seven months of the present October 2018 to September 2019 coffee year to be 390,000 bags or 4.97% higher than the same period in the previous coffee year, at a total of 8,233,000 bags. 

The National Coffee Institute of Honduras have reported the countries coffee exports for the month of April were 79,344 bags or 9.86% higher than the same month last year, at a total of 883,917 bags.   They report that due to some prior lower performing months, that this contributes to the countries cumulative coffee exports for the first seven months of the present October 2018 to September 2019 coffee year to be 11% lower than the same period in the previous coffee year, at approximately 3.7 million bags. 

The Uganda Coffee Development authority have reported that the countries coffee exports for the month of March were 14,884 bags or 4.46% higher than the same month last year, at a total of 348,230 bags.   This has contributed to the country’s cumulative coffee exports for the first six months of the present October 2018 to September 2019 coffee year to be 192,262 bags or 8.24% lower than the same period in the previous coffee year, at a total of 2,142,277 bags. 

More notable though and reflecting the soft global coffee prices is the fact that the value of the Ugandan coffee exports for the first six months of the present October 2018 to September 2019 coffee year is US$ 51,036,847.00 or 19.89% lower than the value of coffee exports for the same period in the previous coffee year.   A factor that remains a concern for all coffee producers, albeit that some like Brazil, do have some relief coming from the softer nature of their domestic currency. 

The July to July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 29.59 usc/Lb., while this equates to 32.66% 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 2,779 bags on Friday; to register these stocks at 2,440,694 bags.  There was meanwhile a smaller in number 641 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,779 bags. 

The commodity markets were mixed in trade on Friday, to see the overall macro commodity index taking a steady track for the day.   The Oil, Cocoa, Cotton, Copper, Orange Juice, Corn, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, Coffee, Wheat and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.14% higher; to see this index registered at 395.28.   The day starts with the U.S. Dollar steady and trading at 1.312 to Sterling, at 1.119 to the Euro and with the US Dollar buying 3.937 Brazilian Real. 

The London and New York markets started the day on Friday trading marginally south of par, but with both markets showing a degree of stability and entering the early afternoon trading around par.  As the afternoon progressed the New York market attracted support an moved up into positive territory, while the London market remained trading around par, but this was short lived and pressure started to impact upon both markets and to see the markets move down into negative territory.   Setting the markets on track for a soft pre long weekend close for the London market that is closed for a Bank Holiday today and for a soft end of the week for the New York market, which registered losses of 3.8% for the week. 

The London market ended the day on a negative note and with 82.6% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 90.5% of the earlier losses of the day intact.   This mixed close does not assist to inspire confidence and one might foresee little better than a hesitant steady start for the New York market trading solo today, against the prices set on Friday, as follows: 

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

MAY   1321 – 15                                            MAY     89.25 – 1.00

JUL    1345 – 19                                            JUL       90.60 – 0.95

SEP    1362 – 17                                            SEP      92.95 – 1.00

NOV   1381 – 16                                            DEC      96.55 – 1.10

JAN    1400 – 16                                            MAR   100.10 – 1.20

MAR   1420 – 16                                            MAY   102.40 – 1.20

MAY   1441 – 15                                            JUL     104.50 – 1.30

JUL    1462 – 15                                            SEP     106.55 – 1.30

SEP    1482 – 15                                            DEC    109.65 – 1.20

NOV   1501 – 14                                             MAR   112.75 – 1.10