Coffee Market Report July 30 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 increase their net short sold position within the market by 37.36% over the week of trade leading up to Tuesday 23rd. July; to register a new net short sold position of 14,867 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.2%, to register a net long position of 45,729 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 13.44%; 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 little changed to perhaps marginally increased, following the period of mixed but overall softer trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector of this market increased their net short sold position within the market by 10.58% over the week of trade leading up to Tuesday 23rd. July; to register a short-sold position of 30,055 Lots.  This net short sold position which is the equivalent of 5,009,167 bags has most likely been little changed, following the period of mixed but overall sideways trade that has since followed. 

The General Statistics Office in Vietnam have with the month of July coming to a close, estimated that the countries coffee exports for the month shall total 2.75 million bags.   This they say shall contribute to the country’s cumulative exports for the first seven months of this year to be 7.6% lower than the same period last year, at a total of 18.07 million bags. 

But more striking and while the volume of exports is only 7.6% lower, the General Statistics Office in Vietnam and in terms of the country having to export against the soft reference prices of the coffee terminal markets, foresee that the value of the country’s coffee exports for the first seven months of this year shall be 18.7% lower than the same period last year.   A factor common to most other coffee producers, which remains a concern for the industry in general. 

Reports out of Brazil that indicate that due to erratic flowering last year and to rain interruptions during the start of the harvest of the new Brazil arabica coffee crop, that there are relatively lower percentages of top-quality coffees coming with the new crop that is close to completion of the harvest.   This along with talk of another bout of frost threatening cold weather due for the weekend and early in the coming week, assisted to buoy some speculative spirts in trade yesterday. 

The September to September contracts arbitrage between the London and New York markets broadened yesterday; to register this at 38.96 usc/Lb.   This equates to 38.52% 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 3,117 bags yesterday; to register these stocks at 2,365,186 bags.  There was meanwhile a smaller in number 2,282 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,604 bags. 

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index taking a steady track for the day.   The Oil, Sugar, Coffee, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Cocoa, Cotton and Orange Juice markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1% higher; to see this index registered at 396.75.   The day starts with the U.S. Dollar steady and trading at 1.213 to Sterling, at 1.113 to the Euro and with the US Dollar buying 3.781 Brazilian Real. 

The London market started the day yesterday on a softer note, while the New York market started the day with modest buoyancy and mostly priced around par, to see the markets taking this mixed track into the early afternoon trade.   As the afternoon progressed the London market attracted further selling pressure and to move deeper into negative territory, while the New York market followed suit in a more sedate manner and moved into modest negative territory.   However, with the talk of frost and quality out of Brazil there was a later in the day reversal in fortunes for the New York market, which recovered and with buy stops being triggered, moved relatively sharply back into positive territory and with the London market following suit and starting on a steady upside track for the rest of the day, but with the New York market coming off the highs. 

The London market ended the day on a very positive note and with 93.1% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 51.9% of the earlier gains of the day intact. This recovery for the markets and ahead of the uncertainty of the coming weather for Brazil, is likely to side-line sellers and assist towards a follow through steady start for the markets for early trade today, against the prices set yesterday, as follows: 

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

SEP    1371 + 27                                              SEP    101.15 + 1.40

NOV   1397 + 24                                              DEC    104.75 + 1.35

JAN    1424 + 23                                              MAR   108.50 + 1.40

MAR   1451 + 22                                              MAY   110.85 + 1.40

MAY   1480 + 21                                              JUL    112.95 + 1.45

JUL    1509 + 22                                              SEP    115.05 + 1.50

SEP    1535 + 22                                              DEC   118.10 + 1.55

NOV   1560 + 23                                              MAR   121.05 + 1.60

JAN    1585 + 28                                              MAY   123.00 + 1.65

MAR   1605 + 28                                               JUL   124.80 + 1.60