Coffee Market Report December 03 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 59.7% over the week of trade leading up to Tuesday 26th. November; to register a new short sold position of 7,592 Lots. This net short-sold position which is the equivalent of 2,152,298 bags has most likely been decreased, 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 25.64% over the week of trade leading up to Tuesday 26th. November; to register a short-sold position of 16,998 Lots.  This net short sold position which is the equivalent of 2,833,000 bags has most likely been further decreased, following the period of mixed but overall sideways trade that has since followed. 

The National Coffee Institute of Honduras have reported that the country’s coffee exports for the month of November were 43.6% higher than the same month last year, at a total of 163,540 bags. This they say has contributed to the cumulative coffee exports for the first two months of the present October 2019 to September 2020 coffee year to be 16% higher than the same period in the previous coffee year, at a total of 248,520 bags. 

The March to March contracts arbitrage between the London and New York markets broadened yesterday; to register this at 58.04 usc/Lb.  This equates to 47.57% 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 38,135 bags yesterday; to register these stocks at 2,081,728 bags, with 87.4% of these certified stocks being held in Europe at a total of 1,819,707 bags and the remaining 12.6% being held in the USA at a total of 262,021 bags.  There was a smaller in number decrease to the number of bags pending grade to this exchange, by 6,553 bags; to register these pending grading stocks at 41,235 bags. 

The commodity markets were mostly softer in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Oil, Natural Gas, Coffee and Corn markets ended the day on a positive note, while the Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Soybean, 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 0.0099% higher; to see this index registered at 401.0540.   The day starts with the U.S. Dollar steady and showing some degree of buoyancy, trading at 1.294 to Sterling, at 1.107 to the Euro and with the US Dollar buying 4.223 Brazilian Real. 

The London and New York markets started the day yesterday trading around par, both markets maintained this modest soft stance into the early afternoon trade. As the afternoon progressed Both the London and New York markets started to attract buying support to move into positive territory for the day. The London market hit a ceiling a dropped back from the highs of the day to close on a modest positive note, while the New York market continued its upward trend to close near the highs of the day. 

The London market ended the day on a positive note, and with 21.05% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, and with 71.08% of the earlier gains of the day intact. This close, albeit that the London market did hit a ceiling and came off its highs of the day, might nevertheless inspire some degree of confidence. To possibly set the markets for another hesitant steady start for early trade today, against the prices set yesterday, as follows:   

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

JAN    1388 + 3                                                             MAR   122.00 + 2.95

MAR   1410 + 4                                                             MAY   124.25 + 3.00

MAY   1424 + 3                                                             JUL    126.15 + 3.00

JUL    1441 + 3                                                             SEP    127.80 + 3.00

SEP    1459 + 4                                                             DEC   129.65 + 2.95

NOV   1480 + 4                                                             MAR   131.65 + 2.90

JAN    1501 + 4                                                             MAY   133.00 + 2.75

MAR   1524 + 3                                                             JUL    134.30 + 2.60

MAY   1546 + 2                                                             SEP    135.60 + 2.45