Coffee Market Report November 04 2019

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within this market by 8.30% over the week of trade leading up to Tuesday 29th. October; to register a new short sold position of 50,777 Lots. This net short-sold position which is the equivalent of 14,395,054 bags has most likely been little changed, following the period of mixed but overall softer trade that has since followed. 

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 6.11% over the week of trade leading up to Tuesday 29th. October; to register a short-sold position of 53,835 Lots.  This net short sold position which is the equivalent of 8,972,500 bags has most likely been little changed, following the period of mixed but overall softer trade that has since followed. 

The National Coffee Institute of Honduras have reported that the country’s coffee exports for the month of October were 12.2% lower than the same month last year, at a total of 88,695 bags. The October figure which is the first month of the new October 2019 to September 2020 coffee year does not reflect the decline in production that Honduran Industry officials are expecting to see due to lower prices. They are predicted to see a 3.4% drop in exports for the 2019 to 2020 harvest. 

The December to January contracts arbitrage between the New York and London markets broadened on Friday; to register this at 44.04 usc/Lb.  This equates to 42.35% 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 6,455 bags on Friday; to register these stocks at 2,234,502 bags, with 87.4% of these certified stocks being held in Europe at a total of 1,952,440 bags and the remaining 12.6% being held in the USA at a total of 282,062 bags.  There was a smaller in number increase to the number of bags pending grade to this exchange, by 4,400 bags; to register these pending grading stocks at 15,543 bags. 

The commodity markets were firmer in trade on Friday, to see overall macro commodity index taking a firm sideways track for the day. The Gold, Silver, Platinum, Palladium, New York Arabica Coffee and Cocoa markets ended the day on a positive note, while the Sugar and London Robusta Coffee markets remained unchanged on the day.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.482 % higher; to see this index registered at 407.960.   The day starts with the U.S. Dollar steady, trading at 1.294 to Sterling, at 1.117 to the Euro and with the US Dollar buying 4.988 Brazilian Real. 

The London and New York markets started the day on Friday trading around par of par, both markets maintained this stance into the early afternoon trade. As the afternoon progressed both the London and the New York markets gained support to trade in positive territory. The New York market continued on this positive track until the close where it hit a ceiling and dropped back to settle near the highs of the day, while the London market fell back from the highs of the day to settle around par at the close. 

The London market ended the day unchanged from the previous days trade, while the New York market ended the day on a positive note, and with 87.2% of the earlier gains of the day intact. This positive close, with the Brazil Real showing some signs of buoyancy is likely to inspire some degree of confidence, to see the markets set for another hesitant steady start for early trade today, against the prices set on Friday, as follows:   

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

NOV   1289 – 4                                                            DEC    104.00 + 2.05  

JAN    1322  Unch                                                       MAR   107.55 + 2.10  

MAR   1339 + 1                                                            MAY   109.65 + 2.10

MAY   1354 + 1                                                            JUL    111.65 + 2.15

JUL    1374 – 1                                                            SEP    113.40 + 2.15

SEP    1397 – 2                                                            DEC   115.90 + 2.10

NOV   1418 – 5                                                            MAR   118.55 + 2.10

JAN    1441 – 6                                                            MAY   120.15 + 2.10

MAR   1466 – 6                                                            JUL    121.70 + 2.10