Coffee Market Report July 29 2019

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within this market by 13.44%; over the week of trade leading up to Tuesday 23rd. July; to register a new net short sold position of 23,668 Lots.  This net short-sold position which is the equivalent of 6,709,773 bags has most likely been further increased, following the period of overall more negative trade that has since followed. 

A Reuters poll of a combination of nice traders and market analysts has concluded that the Global coffee supply for the coming October 2019 to September 2018 Coffee year, shall see a 2.5 million bags deficit coffee supply.   But one might comment that this relatively modest deficit coffee supply as against the ample global coffee stocks, is not really a matter of concern to the consumer market industries.  

This Reuters poll concluded that the New York arabica coffee market on the back of reduced arabica coffee supply from this year’s smaller Brazil crop, shall increase in value for the second delivery month to 115 usc/Lb.   The poll also concluded that the London robusta coffee market for the second delivery position shall shall rise in a more sedate manner, to end the year at US$ 1,455.00 per Mt. 

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 38.79 usc/Lb., while this equates to 38.89% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,570 bags on Friday; to register these stocks at 2,368,303 bags.  There was meanwhile a smaller in number 1,387 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 12,322 bags. 

The commodity markets were mixed but mostly tending softer on Friday, to see the overall macro commodity index tending negative for the day. The U.S. Oil, Sugar, Cotton, Soybean and Gold markets ended the day on a positive note, while the Brent Oil, Natural Gas, Cocoa, Coffee, Copper, Orange Juice, Wheat, Corn and Silver markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.51% lower; to see this index registered at 396.36.   The day starts with the U.S. Dollar steady and trading at 1.237 to Sterling, at 1.113 to the Euro and with the US Dollar buying 3.775 Brazilian Real. 

The London and New York markets started the day on Friday on a steady note but with both markets soon coming under pressure, to move into negative territory and to take a negative track into the early afternoon trade.  As the afternoon progressed both markets came under early pressure and to move deeper into negative territory, but with the New York market soon bouncing off the lows and to move briefly back into positive territory, while the London market moved back up to close to par.   The markets did however once again falter and with the London market plunging back into relatively deep negative territory and the New York market taking a less aggressive negative stance, to set the markets on track for a soft close for the day and the week. 

The London market ended the day on a negative note and with 53.8% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 56.2% of the earlier losses of the day intact. This softer close and with nothing in the way of supportive fundamental news in play, is unlikely to inspire confidence and to set the markets for at best a hesitant steady start for early trade today, against the prices set on Friday, as follows: 

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

SEP    1344 – 14                                              SEP      99.75 – 0.90

NOV   1373 – 14                                              DEC    103.40 – 0.95

JAN    1401 – 13                                              MAR   107.10 – 0.95

MAR   1429 – 13                                              MAY   109.45 – 0.95

MAY   1459 – 11                                              JUL    111.50 – 1.00

JUL    1487 – 10                                              SEP    113.55 – 0.95

SEP    1513 – 9                                                DEC   116.55 – 0.90

NOV   1537 – 9                                                MAR   119.45 – 0.90

JAN    1557 – 8                                                MAY   121.35 – 0.90

MAR   1577 opening                                        JUL   123.20 – 0.90