Coffee Market Report August 05 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 37.61%; over the week of trade leading up to Tuesday 30th. July; to register a new net short sold position of 32,570 Lots.  This net short-sold position which is the equivalent of 9,233,451 bags has most likely been further increased, following the period of mixed but overall more negative trade that has since followed. 

The National Coffee Institute of Honduras have reported the country’s coffee exports for the month of July were 3,740 bags or 0.54% lower than the same month last year, at a total of 684,453 bags. This has contributed to the country’s cumulative coffee exports for the first ten months of the present October 2018 to September 2019 coffee year to total 6,280,889 bags, which is a figure that seemingly sets the country on target to achieve exports in excess of 7 million bags for the present coffee year. 

The International Coffee Organisation ICO have reported that world coffee exports for the month of June were 2.83% higher than the same month last year, at a total of 10.9 million bags. This they say has contributed to the cumulative global coffee exports for the first nine months of the October 2018 to the September 2019 coffee year to be 5,940,000 bags or 6.5% higher than the same period in the previous coffee year, at a total of 97,28 million bags. 

The November to December contracts arbitrage between the London and New York markets broadened on Friday; to register this at 41.05 usc/Lb.   This equates to 40.36% 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 275 bags on Friday; to register these stocks at 2,355,609 bags.  There was meanwhile a larger in number 586 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,970 bags. 

The commodity markets were mixed in trade on Friday, to see the overall macro commodity index taking something of a sideways track for the day. The Oil, Coffee, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, Cocoa, Cotton, Copper 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 0.29% lower; to see this index registered at 385.70.   The day starts with the U.S. Dollar near to steady and trading at 1.213 to Sterling, at 1.112 to the Euro and with the US Dollar buying 3.885 Brazilian Real. 

The London market started the day on Friday on a softer note while the New York market started the day trading around par, to see the markets maintaining this stance into the early afternoon trade. As the afternoon progressed and despite the softer nature of the Brazil Real the New York market maintained its buoyancy, which was presumably assisted by concerns of a cold weekend due for the Brazil coffee districts. This buoyancy in the New York market was matched by the London market and to see both markets post reasonable gains, but to hit a ceiling and with the New York market coming off the highs, while the London market headed back to end the day close to par. 

The London market ended the day on a modestly positive note and with 12.5% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 54.5% of the earlier gains of the day intact. This close ahead of the early morning weather reports from Brazil today does little to indicate direction, but one would think with a weak Brazil Real in play one can expect 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. 

SEP    1312 + 5                                             SEP      98.15 + 0.90

NOV   1337 + 2                                             DEC    101.70 + 0.90

JAN    1364 + 1                                             MAR   105.25 + 0.75

MAR   1391 no change                                MAY   107.55 + 0.70

MAY   1420 + 1                                             JUL    109.65 + 0.65

JUL    1449 + 1                                             SEP    111.70 + 0.60

SEP    1478 + 2                                             DEC   114.75 + 0.60

NOV   1507 + 4                                             MAR   117.80 + 0.60

JAN    1535 + 7                                             MAY   119.75 + 0.60

MAR   1560 + 13                                           JUL    121.55 + 0.60