Coffee Market Report August 28 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 19.56% over the week of trade leading up to Tuesday 20th. August; to register a new net short sold position of 47,305 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 3.66%, to register a net long position of 40,615 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 13.13%; 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 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 decrease their net short sold position within the market by 3.64% over the week of trade leading up to Tuesday 20th. August; to register a short-sold position of 43,765 Lots.  This net short sold position which is the equivalent of 7,294,167 bags has most likely been marginally decreased, following the period of mixed but overall more positive trade that has since followed. 

Following the completion of the overall smaller Brazil coffee crop this year and ahead of a higher volume winter roasting season for the main northern hemisphere consumer markets and along with the steady growth in global coffee consumption, some within the speculative sector of the coffee market are starting to be cautious over the earlier perception of medium to longer term plentiful coffee supply. This ahead of the uncertainty of the quality of the forthcoming spring and summer Brazil rain season that shall determine the size of the 2020 Brazil coffee crop, is seemingly assisting to limit the downside of the coffee markets for the present. 

The November to December contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 36.41 usc/Lb.   This equates to 37.48% 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 6,257 bags yesterday; to register these stocks at 2,354,100 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 8,528 bags. 

The commodity markets were mixed in trade yesterday, with the overall macro commodity index taking a modest upside track for the day. The Oil, Cocoa, London Robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, New York Arabica Coffee, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.26% higher; to see this index registered at 379.85.   The day starts with the U.S. Dollar steady and trading at 1.228 to Sterling, at 1.109 to the Euro and with the US Dollar buying 4.126 Brazilian Real. 

The London market following the long weekend bank holiday predictably started the day trading on a catch-up positive note, while the New York market started the day trading around par. The New York market soon started to come under pressure and to move into negative territory, while the London market continued to show buoyancy and to see the markets maintain this mixed stance, into the early afternoon trade. As the afternoon progressed the London market added value and the New York market bounced back from the lows and into more modest negative territory and with the markets maintaining this mixed stance through to the close. 

The London market ended the day on a very positive note and with 80.6% of the earlier gains of the day intact, while the New York market ended the day on a negative note, but having recovered 68.2% of the earlier losses of the day. This close and with the ability of the New York market to have made a reasonable recovery from the earlier losses of the day might assist to inspire some hesitant confidence, to set the markets on track for a steady start for early trade today, against the prices set yesterday, as follows:   

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

SEP    1316 + 37                                                 SEP      93.80 – 0.35

NOV   1339 + 25                                                 DEC      97.15 – 0.35 

JAN    1361 + 22                                                 MAR   100.75 – 0.35 

MAR   1383 + 19                                                 MAY   103.05 – 0.45

MAY   1408 + 17                                                 JUL    105.25 – 0.45

JUL    1432 + 15                                                 SEP    107.20 – 0.55

SEP    1458 + 14                                                 DEC   110.15 – 0.50

NOV   1485 + 14                                                 MAR   113.05 – 0.55

JAN    1511 + 14                                                 MAY   115.00 – 0.55

MAR   1531 + 14                                                 JUL    116.90 – 0.55