Coffee Market Report May 08 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 6.61% over the week of trade leading up to Tuesday 30th. April; to register a new net short sold position of 73,304 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.1%, to register a net long position of 38,940 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 6.59%; 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 overall more negative trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

It was a shocking day of trade within the coffee markets yesterday, with the markets coming under severe selling pressure and with the New York market setting new thirteen-year lows and the London market new nine-year lows.   The prospects of a new large Brazil crop shortly to start impacting upon an already well stocked market, impacting upon the prevailing negative sentiment.  

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 29.26 usc/Lb., while this equates to 33.25% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 2,438,992 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,990 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 3,667 bags or 0.19% over the week of trade leading up to Monday 6th. May, to see these stocks registered at 1,965,000 bags, on the day. 

The commodity markets encountered renewed muscle for the U.S. dollar and with many markets tending softer, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas, Sugar, Wheat, Corn, Soybean and Gold markets ended the day on a positive note, while the Oil, Cocoa, Coffee, Cotton, Copper, Orange Juice 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 0.45% lower; to see this index registered at 389.98.   The day starts with the U.S. Dollar near to steady and trading at 1.307 to Sterling, at 1.121 to the Euro and with the US Dollar buying 3.970 Brazilian Real. 

The London market started the day yesterday on a softer note and the New York market trading close to par, but to soon slip back into negative territory, to see the markets taking a softer track into the early afternoon trade.  As the afternoon progressed both markets started to come under further pressure and with sell stops being triggered, to see both markets experiencing rising volume and severe losses and with the markets maintaining this soft stance through to the close of the day. 

The London market ended the day on a very soft note and with 79.4% of the earlier losses of the day intact, while the New York market likewise ended the day on a very soft note and with 84.3% of the earlier losses of the day intact.  This close inspires no confidence and one might expect little better than a hesitant steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY   1271 – 50                                            MAY     86.65 – 2.15

JUL    1295 – 50                                            JUL       88.00 – 2.15

SEP    1313 – 49                                            SEP      90.40 – 2.15

NOV   1332 – 49                                            DEC      93.90 – 2.25

JAN    1351 – 49                                            MAR     97.50 – 2.20

MAR   1371 – 49                                            MAY     99.85 – 2.25

MAY   1393 – 48                                            JUL     102.05 – 2.20

JUL    1415 – 47                                            SEP     104.10 – 2.25

SEP    1436 – 46                                            DEC    107.20 – 2.25

NOV   1454 – 47                                             MAR   110.30 – 2.25