Coffee Market Report July 02 2019

2nd July, 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 12.76% over the week of trade leading up to Tuesday 25th. June; to register a new net short sold position of 30,855 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 4.60%, to register a net long position of 42,376 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 2.04%; over the week of trade leading up to Tuesday 18th. June; to register a new net short sold position of 40,168 Lots.  This net short-sold position which is the equivalent of 11,387,450 bags has most likely been marginally decreased again, following the period of mixed but overall more positive 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 increase their net short sold position within the market by 3.93% over the week of trade leading up to Tuesday 25th. June; to register a short-sold position of 29,226 Lots.  This net short sold position which is the equivalent of 4,871,000 bags has most likely been marginally decreased, following the period of mixed but overall more positive trade that has since followed. 

The Indonesian government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of June were 65,375 bags or 52.54% lower than the same month last year, at a total of 59,040 bags.  This contributes to the islands cumulative robusta coffee exports for the first nine months of the present October 2018 to September 2019 coffee year to be 50,374 bags or 4.1% lower than the same period in the previous coffee year, at a total of 1,229,705 bags. 

The September to September contracts arbitrage between the London and New York markets widened yesterday, to register this at 44.49 usc/Lb., while this equates to 39.96% 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 167 bags yesterday; to register these stocks at 2,370,458 bags.  The number of bags pending grading to the exchange were unchanged on the day; to register these pending grading stocks at 4,344 bags. 

It was a mixed day on the commodity markets, the latest round of trade tariff talks between China and USA met with positive sentiment, while the US Dollar firmed on the day. It was a positive day on the Oil markets, Cocoa, Coffee, Cotton and Palladium, whereas a softer day for Sugar, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.17% higher, to see this index registered at 398.63.  The day starts with the U.S. Dollar steady and trading at 1.264 to Sterling, at 1.129 to the Euro and with the US Dollar buying 3.84 Brazilian Real. 

The coffee market opened the day yesterday in good volume and in positive territory, with New York tracking higher ahead of the business hours opening in America.  Supported by the overall positive mood across the macro, the continuation of talk of a prospective cold front to reach the southern coffee growing areas in Brazil and speculative short covering, both markets continued to trade within the newly gained positive trading range as the afternoon approached in New York. Lending an influence to the coffee markets, the US Dollar posted gains against a basket of other major currencies as the day progressed and the value in Brazil Real terms brought producer sellers back to the floor.  The afternoon session held in positive territory although giving back some of the gains in both markets, to set the close in both markets close near to middle of the day’s trading range, and set the close after a heavy volume day in New York and comparatively fair volume day in London, as follows:

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

JUL    1439 + 18                                            JUL    110.15 + 1.90
SEP    1474 + 23                                            SEP   111.35 + 1.90
NOV   1503 + 24                                            DEC   114.95 + 1.90
JAN    1526 + 23                                            MAR   118.50 + 1.90
MAR   1550 + 24                                            MAY   120.55 + 1.90
MAY   1573 + 24                                            JUL    122.35 + 1.85
JUL    1592 + 24                                            SEP    124.15 + 1.75
SEP    1611 + 24                                            DEC   126.95 + 1.65
NOV   1626 + 24                                            MAR   129.85 + 1.60
JAN    1641 + 24                                            MAY   131.85 + 1.55