Coffee Market Report June 11 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 36.78% over the week of trade leading up to Tuesday 4th. June; to register a new net short sold position of 40,727 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 6.08%, to register a net long position of 40,727 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 34.16%; to register a new net short sold position of 41,112 Lots. This net short-sold position which is the equivalent of 11,655,070 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. 

The Council of Coffee Exporters of Brazil Cecafé have reported that Brazil’s exports of arabica coffees for the month of May were 1,376,000 bags or 95.56% higher than the same month last year, at a total of 2,816,000 bags.  But they note that due to the soft nature of the reference prices of the international coffee markets, that the average price for these arabica coffees in U.S. Dollar terms, was 22.37% lower than the prices achieved, during the same month last year. 

Cecafé have also reported that the country’s exports of conilon robusta coffees for the month of May were 330,000 bags or 717.39% higher than the same month last year, at a total of 376,000 bags.  While the exports of value added soluble calculated in terms of green coffee were 85,000 bags or 35.27% higher than the same month last year, at a total of 326,000 bags. 

This Cecafé report therefore indicating that the combined coffee exports for the Month of May were 1,791,000 bags or 103.71% higher than the same month last year, at an approximate total of 3,518,000 bags.   While the President of Cecafé Nelson Carvalhaes made comment that despite the low prices, the council remains positive for the country to continue to export large volumes and to grow market share within the consumer markets. 

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 35.79 usc/Lb., while this equates to 35.38% 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 1,360 bags yesterday; to register these stocks at 2,383,358 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 1,908 bags. 

The commodity markets were mixed in trade yesterday, with the overall macro commodity index taking something of a near to steady sideways track for the day.  The Natural Gas, Cocoa, Cotton, Copper, Wheat, Corn and Soybean markets ended the day on a positive note, while the Oil, Sugar, Coffee, Orange Juice, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.22% lower, to see this index registered at 390.10.   The day starts with the U.S. Dollar steady and trading at 1.268 to Sterling, at 1.132 to the Euro and with the US Dollar buying 3.886 Brazilian Real. 

The London market and New York markets started the day yesterday trading in negative territory, but with the London market soon moving back to trade close to par, while the New York market remained within negative territory into the early afternoon trade.   As the afternoon progressed the London market remained mostly near to par, while the New York market started to attract further selling pressure and with sell stops being triggered to accentuate the losses.  The London market came under late in the day selling pressure to move south and join the New York market in negative territory, but in a less dramatic manner.  

The London market ended the day on a negative note and with 87.5% of the losses of the day intact, while the New York market ended the day on a very negative note and with 81.7% of the earlier losses of the day intact.   This close does little to inspire confidence and one might expect to see little better than a cautious 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. 

JUL    1415 – 15                                            JUL      98.60 – 2.35

SEP    1441 – 14                                           SEP    101.15 – 2.45

NOV   1463 – 12                                           DEC    104.90 – 2.40

JAN    1484 – 12                                           MAR   108.50 – 2.40

MAR   1504 – 12                                           MAY   110.70 – 2.35

MAY   1524 – 11                                            JUL    112.50 – 2.30

JUL    1542 – 11                                            SEP    114.20 – 2.30

SEP    1562 – 11                                            DEC   116.95 – 2.25

NOV   1578 – 10                                            MAR   119.70 – 2.20

JAN    1593 – 10                                            MAY   121.50 – 2.20