Coffee Market Report January 07 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this market increase their net long position within the market by 0.4% over the week of trade leading up to Tuesday 31st. December; to register a new net long position of 21,628 Lots which is the equivalent of 6,131,442 bags.  This position has most likely been further increased, following the period of mixed but overall firmer trade that has since followed. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 63.17 usc/Lb.  This equates to 50.74% 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 2,280 bags yesterday; to register these stocks at 2,028,332 bags, with 88.6% of these certified stocks being held in Europe at a total of 1,796,096 bags and the remaining 11.4% being held in the USA at a total of 232,236 bags.  There was meanwhile a larger in number increase by 25,082 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 157,098 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a sideways track for the day. The Sugar, Cotton, Orange Juice, Soybean, Gold and Silver markets ended the day on a positive note, the Copper market remained unchanged on the day, while the Oil, Natural Gas, Cocoa, Coffee, Wheat and Corn markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.0618% lower; to see this index registered at 421.5755   The day starts with the U.S. Dollar steady, trading at 1.317 to Sterling, at 1.119 to the Euro and with the US Dollar buying 4.062 Brazilian Real. 

The London and New York markets started the day yesterday 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. The London market hit a price floor and bounced back from the lows of the day to limit the losses for the afternoon trade, while the New York market continued on its downward trend for much of the afternoon trade. 

The London market ended the day on a negative note, and with 64.5% of the earlier losses of the day intact, while the New York market ended the day on likewise negative note, and with 87.5% of the earlier losses of the day intact. This soft  and lacklustre 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 yesterday, as follows:   

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

MAR   1352 – 20                                                               MAR   122.15 – 4.20

MAY   1371 – 20                                                               MAY   124.50 – 4.15

JUL    1490 – 20                                                               JUL     126.65 – 4.10

SEP    1409 – 19                                                               SEP    128.65 – 4.00

NOV   1427 – 19                                                               DEC    131.20 – 3.90

JAN    1444 – 19                                                               MAR   133.60 – 3.90

MAR   1467 – 19                                                               MAY   134.70 – 3.90

MAY   1490 – 19                                                               JUL    135.55 – 3.95

JUL    1511 – 19                                                               SEP    136.35 – 3.95