Coffee Market Report August 06 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 77.06% over the week of trade leading up to Tuesday 30th. July; to register a new net short sold position of 26,323 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 6.16%, to register a net long position of 42,912 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 37.61%; 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 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 21.83% over the week of trade leading up to Tuesday 30th. July; to register a short-sold position of 36,615 Lots.  This net short sold position which is the equivalent of 6,102,500 bags has most likely been further increased, following the period of mixed but overall negative trade that has since followed. 

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of July was 266,000 bags or 25.31% higher than the same month last year, at a total of 1,317,000 bags.   This has contributed to the countries cumulative production for the first ten months of the present October 2018 to September 2019 coffee year to be 156,000 bags or 1.36% higher than the same period in the previous coffee year, at a total of 11,659,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of July were 96,000 bags or 9.04% higher than the same month last year, at a total of 1,158,000 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 be 777,000 bags or 7.21% higher than the same period in the previous coffee year, at a total of 11,549,000 bags. 

The Ugandan Coffee Development Authority have reported that their country’s coffee exports for the month of June were 22,597 bags or 7.08% higher than the same month last year, at a total of 341,628 bags. This has contributed to the country’s cumulative coffee exports for the first nine months of the present October 2018 to September 2019 coffee year to have been 129,713 bags or 3.97% lower than the same period in the previous coffee year, at a total of 3,137,118 bags. 

Well illustrating the negative effects upon coffee producers of the reference prices of the soft coffee terminal markets over the recent months is the fact that while the volume of Ugandan coffee exports were 3.9% lower for the first nine months of the coffee year, the value of these exports for the period was 13.17% lower, at a total of US$ 310,231,166.00. A negative financial factor that is common to coffee producers in general. 

The November to December contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 39.14 usc/Lb.   This equates to 39.48% 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 1,776 bags yesterday; to register these stocks at 2,353,833 bags.  There was meanwhile a smaller in number 826 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,796 bags. 

The commodity markets were mixed in trade yesterday, but with many markets tending softer, to see the overall macro commodity index on a negative track for the day. The Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, 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 0.52% lower; to see this index registered at 383.69.   The day starts with the U.S. Dollar steady and trading at 1.215 to Sterling, at 1.120 to the Euro and with the US Dollar buying 3.974 Brazilian Real. 

The London and New York markets started the day yesterday taking on a modest positive stance, but with the New York market soon slipping back into negative territory and followed by the London market, to see both markets taking a negative stance into the early afternoon trade. As the afternoon progressed and with a weaker Brazil Real in play the New York market started to attract additional selling pressure and triggering sell stops, to accentuate the losses. The London market followed the New York market in a less aggressive manner and with both markets managing to bounce off the lows, but to carry on towards a soft close for the day. 

The London market ended the day on a negative note and with 63.6% of the earlier losses of the day intact, while the New York market ended the day on a negative note and with 67.1% of the earlier losses of the day intact. This soft close and against a softer Brazil Real is unlikely to buoy sentiment and one would think that the markets are only due for a near to steady start for early trade today, against prices set yesterday, as follows:  

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

SEP    1297 – 15                                            SEP      95.65 – 2.50

NOV   1323 – 14                                            DEC      99.15 – 2.55

JAN    1351 – 13                                            MAR   102.75 – 2.50

MAR   1378 – 13                                            MAY   105.05 – 2.50

MAY   1408 – 12                                            JUL    107.20 – 2.45

JUL    1437 – 12                                            SEP    109.30 – 2.40

SEP    1466 – 12                                            DEC   112.35 – 2.40

NOV   1495 – 12                                            MAR   115.35 – 2.45

JAN    1522 – 13                                            MAY   117.35 – 2.40

MAR   1549 – 11                                           JUL    119.20 – 2.35