Coffee Market Report June 17 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 4.25%; over the week of trade leading up to Tuesday 11th. June; to register a new net short sold position of 39,364 Lots.  This net short-sold position which is the equivalent of 11,159,520 bags has most likely been marginally increased again, following the period of mixed but overall more 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 6.13% over the week of trade leading up to Tuesday 11th. June; to register a short-sold position of 24,262 Lots.  This net short sold position which is the equivalent of 4,043,667 bags has most likely been marginally increased again, following the period of mixed but overall more negative trade that has since followed. 

The latest report from the United States Department of Agriculture USDA has forecast that global coffee supply for the coming October 2019 to September 2020 coffee year shall be 5,370,000 bags or 3.08% lower than the present coffee year, to total 169,130,000 bags.  As against this, the USDA forecast that global coffee consumption for the coming coffee year shall increase by 2.5%, to total 167.9 million bags.   

The report comes to the fore with a forecast for a small surplus coffee supply for the coming coffee year and might be seen, to be mildly bearish in nature.   But one might comment that in the terms of numbers, that while the consumption figure is in line with many other private trade and industry forecasts, that the USDA production number is leaning towards the high side of the many other forecasts that have recently come to the market.  

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 34.91 usc/Lb., while this equates to 35.6% 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 689 bags on Friday; to register these stocks at 2,383,159 bags.  There were meanwhile a larger in number 1,080 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,780 bags. 

The commodity markets were mixed in trade on Friday and with the U.S. dollar showing some degree of buoyancy for the day, to see the overall macro commodity index taking something of a sideways track for the day.   The Oil, Natural Gas, Sugar, Orange Juice, Wheat, Corn and Soybean markets ended the day on a positive note and the Gold market was steady for the day, while the Cocoa, Coffee, Cotton, Copper and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.04% higher, to see this index registered at 393.34.   The day starts with the U.S. Dollar steady and trading at 1.258 to Sterling, at 1.121 to the Euro and with the US Dollar buying 3.896 Brazilian Real. 

The London and New York markets started the day on Friday trading around par, but with the New York market soon moving up into modest positive territory and with the markets retaining this stance, into the early afternoon trade.  As the afternoon progressed the New York market slipped back to join the London market in trading around par but with the Brazil Real starting to lose value this was short lived and both markets started to come under renewed selling pressure, to see the market moving south into negative territory for late trade. 

The London market ended the day on a negative note and with 84.6% of the losses of the day intact, while the New York market ended the day on a likewise negative note and with 94.4% of the losses of the day intact.   This close does little to inspire and with a lack of supportive fundamental news, one might expect to see little better than a near to steady start for early trade today, against the prices set on Friday, as follows: 

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

JUL    1364 – 20                                            JUL      96.00 – 1.35

SEP    1392 – 22                                           SEP      98.05 – 1.70

NOV   1414 – 23                                           DEC    101.75 – 1.80

JAN    1436 – 23                                           MAR   105.35 – 1.85

MAR   1458 – 23                                           MAY   107.55 – 1.80

MAY   1479 – 23                                            JUL    109.45 – 1.80

JUL    1498 – 23                                            SEP    111.30 – 1.80

SEP    1518 – 23                                            DEC   114.20 – 1.75

NOV   1535 – 23                                            MAR   117.10 – 1.65

JAN    1550 – 23                                            MAY   118.80 – 1.70