Coffee Market Report September 10 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 increased their net short sold position within the market by 12.73% over the week of trade leading up to Tuesday 2nd. September; to register a new net short sold position of 54,022 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.08%, to register a net long position of 39,743 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 12.7%; to register a new net short sold position of 52,009 Lots. This net short-sold position which is the equivalent of 14,744,321 bags has most likely been decreased again, 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 return of the main northern hemisphere consumer market industries from their summer holidays has brought no excitement to the coffee markets, which remain dominated by the bearish sentiment of the speculative sectors of the markets. There is however the new Brazil spring and summer rain season to the fore and for the present the general perspective is for normal weather conditions to come, but with the potential for some market volatility, should these rains prove to be less than perfect. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday; to register this at 39.10 usc/Lb.   This equates to 39.8% price discount for the London Robusta coffee market. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,189 bags yesterday; to register these stocks at 2,332,282 bags.  There was meanwhile a 6,575 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 4,910 bags. 

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index showing a degree of buoyancy for the day. The Oil, Natural Gas, Cocoa, Coffee, Cotton and Wheat markets ended the day on a positive note and the Soybean market was steady for the day, while the Sugar, Copper, Orange Juice, Corn, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.33% higher; to see this index registered at 387.45.   The day starts with the U.S. Dollar steady and trading at 1.234 to Sterling, at 1.104 to the Euro and with the US Dollar buying 4.094 Brazilian Real. 

The London market started the day yesterday trading to the positive side of par and the New York market to the negative side of par, but with both markets soon slipping back into negative territory and to see both markets taking a negative track, into the early afternoon trade. As the afternoon progressed the New York market came under further pressure and moved deeper into negative territory, but with both markets bouncing off the lows and moving back up into positive territory for late trade. 

The London market ended the day on a positive note and with 90% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 54.5% of the earlier gains of the day intact. This close and with the late recovery for the markets, might inspire some degree of confidence, but with the Brazil Real marginally softer again, one might not expect better than a near to steady start for early trade today, against the prices set yesterday, as follows:  

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

SEP    1282 + 10                                                         SEP      95.00 + 1.15

NOV   1304 + 9                                                           DEC      98.25 + 1.20 

JAN    1325 + 8                                                           MAR   101.65 + 1.20 

MAR   1348 + 8                                                           MAY   103.90 + 1.15

MAY   1374 + 8                                                           JUL    106.00 + 1.20

JUL    1400 + 8                                                           SEP    107.95 + 1.15

SEP    1426 + 8                                                           DEC   110.85 + 1.15

NOV   1452 + 8                                                           MAR   113.80 + 1.15

JAN    1479 + 8                                                           MAY   115.80 + 1.15

MAR   1503 + 8                                                           JUL    117.70 + 1.10