Coffee Market Report August 26 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 13.13%; over the week of trade leading up to Tuesday 20th. August; to register a new net short sold position of 47,597 Lots.  This net short-sold position which is the equivalent of 13,493,539 bags has most likely been marginally decreased, following the period of mixed but overall more positive trade that has since followed. 

The Brazil Real started to soften further on Friday, which with the perspective of possible more aggressive selling activity within the internal market in Brazil, encouraged a degree of negative sentiment within the markets on Friday. There was also the softer nature of the overall macro commodity index coming into play, to perhaps add to the negative speculative sentiment for the markets. 

Today is a bank holiday in the United Kingdom, which shall see the London market closed for the day. 

The November to December contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 36.45 usc/Lb.   This equates to 37.95% 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 3,241 bags on Friday; to register these stocks at 2,360,607 bags.  There was meanwhile a 1,877 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 1,070 bags. 

The commodity markets tended softer on Friday, with the overall macro commodity index taking a softer track for the day. The Cocoa ended the day on a positive note, while the Sugar and Coffee markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.73% lower; to see this index registered at 375.59.   The day starts with the U.S. Dollar near to steady and trading at 1.227 to Sterling, at 1.114 to the Euro and with the US Dollar buying 4.120 Brazilian Real. 

The London and New York markets started the day on Friday on a marginally softer note and taking a softer track, into the early afternoon trade. As the afternoon progressed both markets came under pressure and with sell stops being triggered, to accentuate the losses. Both markets did however soon bounce back partially from the lows, to set the markets on something of a sideways negative track for the rest of the days trade. 

The London market ended the day on a negative note and with 61.9% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 55.6% of the earlier losses of the day intact.  This close does little to inspire confidence and especially so in terms of the weak nature of the Brazil Real, which is likely to set the New York market for little better than a near to steady start for the delayed start of trade today, against the prices set on Friday, as follows:   

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

SEP    1279 – 14                                                 SEP       92.60 – 0.90

NOV   1314 – 13                                                 DEC      96.05 – 1.25 

JAN    1339 – 14                                                 MAR     99.65 – 1.25 

MAR   1364 – 16                                                 MAY   102.05 – 1.20

MAY   1391 – 17                                                 JUL    104.30 – 1.20

JUL    1417 – 17                                                 SEP    106.35 – 1.15

SEP    1444 – 17                                                 DEC   109.30 – 1.15

NOV   1471 – 17                                                 MAR   112.20 – 1.15

JAN    1497 – 17                                                 MAY   114.20 – 1.10

MAR   1517 – 17                                                 JUL    116.10 – 1.10