Coffee Market Report January 06 2020

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market increase their net short sold position within the market by 13.5% over the week of trade leading up to Tuesday 31st. December; to register a short-sold position of 14,785 Lots.  This net short sold position is the equivalent of 2,464,167 bags and has most likely been further increased, following the period of mixed though overall firmer trade that has since followed. 

The March to March contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 64.12 usc/Lb.  This equates to 50.75% 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 1,537 bags on Friday; to register these stocks at 2,030,612 bags, with 88.5% of these certified stocks being held in Europe at a total of 1,797,876 bags and the remaining 11.5% being held in the USA at a total of 232,736 bags.  There was meanwhile a smaller in number decrease by 1,365 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 132,016 bags. 

The commodity markets were mixed in trade on Friday, to see overall macro commodity index taking a soft sideways track for the day. The Oil, Natural Gas, Sugar, Orange Juice, Gold and Silver markets ended the day on a positive note, while the Cocoa, Coffee, Cotton, Copper, Wheat, 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 0.1156% lower; to see this index registered at 421.8364   The day starts with the U.S. Dollar steady, trading at 1.308 to Sterling, at 1.116 to the Euro and with the US Dollar buying 4.067 Brazilian Real. 

The London and New York markets started the day on Friday trading close to par on a modest negative note, both markets maintained this modest soft stance into the early afternoon trade. As the afternoon progressed both the London and the New York markets encountered selling pressure to accentuate the losses for the day. Both markets hit a price floor and bounced back from the lows of the day to limit the losses for the afternoon trade. 

The London market ended the day on a modest negative note, and with 57.1% of the earlier losses of the day intact, while the New York market ended the day on likewise modest negative note, and with 44.1% of the earlier losses of the day intact. This soft 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 Friday, as follows:   

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

MAR   1372 – 8                                                               MAR   126.35 – 0.75

MAY   1391 – 6                                                               MAY   128.65 – 0.75

JUL    1410 – 5                                                               JUL     130.75 – 0.70

SEP    1428 – 5                                                               SEP    132.65 – 0.65

NOV   1446 – 5                                                                DEC   135.10 – 0.50

JAN    1463 – 6                                                               MAR   137.50 – 0.40

MAR   1486 – 7                                                               MAY   138.60 – 0.25

MAY   1509 – 7                                                               JUL    139.50 – 0.20

JUL    1530 – 7                                                               SEP    140.30 – 0.30