Coffee Market Report January 02 2020

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 long position within the market by 13.60% over the week of trade leading up to Tuesday 24th December; to register a new net long position of 43,181 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.38%, to register a net long position of 64,354 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increase their net long position within the market by 7,45%; to register a new net long position of 21,542 Lots which is the equivalent of 6,107,062 bags.  This position has most likely been further increased, following the period of mixed but overall firmer trade that has since followed. 

The Indonesian government trade data from Sumatra, which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of December were 55,882 bags or 26.09% higher than the same month last year, at a total of 270,033 bags.  This contributes to the islands cumulative robusta coffee exports for the first three months of the present October 2019 to September 2020 coffee year to be 281,055 bags or 43.04% higher than the same period in the previous coffee year, at a total of 934,125 bags. 

The March to March contracts arbitrage between the London and New York markets narrowed on Tuesday; to register this at 67.01 usc/Lb.  This equates to 51.67% 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 875 bags Tuesday; to register these stocks at 2,032,149 bags, with 88.5% of these certified stocks being held in Europe at a total of 1,799,413 bags and the remaining 11.5% being held in the USA at a total of 232,736 bags.  There was meanwhile a larger in number increase by 1,547 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 131,399 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 2,000 bags over the weeks of trade leading up to Monday 30th December, to see these stocks registered at 2,507,167 bags, on the day. 

The commodity markets were mixed in trade on Tuesday, to see overall macro commodity index taking a soft sideways track for the day. The Cocoa, London Robusta Coffee, Orange Juice, Wheat, Soybean and Gold markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, New York Arabica Coffee, Cotton, Copper, Corn and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is registered at 422.4623.   The day starts with the U.S. Dollar steady, trading at 1.321 to Sterling, at 1.120 to the Euro and with the US Dollar buying 4.019 Brazilian Real. 

The London and New York markets started the day yesterday trading in modest negative territory, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the London market started to attract buying support to take a positive track for the day and end the day on a modest positive note, while the New York Market Continued on its soft track for the afternoon trade to end the day on a negative note. 

The London market ended the day on a modest positive note, and with 50% of the earlier gains of the day intact, while the New York market ended the day on negative note, and with 68.05% of the earlier losses of the day intact. This mixed close does little to inspire confidence and one might expect the markets are due for little better than a hesitant steady start for early trade today, against the prices set on Tuesday, as follows:   

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

JAN    1354 + 7                                                               MAR   129.70 – 2.45

MAR   1382 + 7                                                               MAY   131.90 – 2.45

MAY   1400 + 8                                                               JUL    133.95 – 2.50

JUL    1418 + 7                                                               SEP    135.80 – 2.45

SEP    1436 + 7                                                               DEC   137.95 – 2.30

NOV   1454 + 6                                                               MAR   140.05 – 2.25

JAN    1472 + 6                                                               MAY   141.05 – 2.25

MAR   1495 + 5                                                               JUL    141.95 – 2.25

MAY   1517 + 5                                                               SEP    142.85 – 2.25