Coffee Market Report January 20 2020

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 long position within the market by 20.10% over the week of trade leading up to Tuesday 14th. January; to register a new net long position of 16,708 Lots which is the equivalent of 4,736,644 bags.  This position has most likely been further 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 increase their net short sold position within the market by 30.28% over the week of trade leading up to Tuesday 14th. January; to register a short-sold position of 22,578 Lots.  This net short sold position is the equivalent of 3,763,000 bags and has most likely been further increased, following the period of mixed though overall sideways trade that has since followed. 

Today is the Martin Luther King Day holiday in the U.S.A. and this market shall be off the field of play for the day, which is likely to set the London market for something of a dull and low volume day of trade for the day.   But with now only five trading days ahead of the week long shut down of the Vietnam market for the countries Tet holidays, one might expect to see some price fixation activity for the London market coming to the fore. 

The March to March contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 52.33 usc/Lb.  This equates to 46.66 % 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 13,212 bags on Friday; to register these stocks at 2,115,340 bags, with 88.7% of these certified stocks being held in Europe at a total of 1,876,100 bags and the remaining 11.3% being held in the USA at a total of 239,240 bags.  There was meanwhile a smaller in number decrease by 10,814 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 119,755 bags. 

The commodity markets were mixed in trade on Friday, to see overall macro commodity index taking a firm sideways track for the day. The Oil, Natural Gas, Sugar, Cocoa, London Robusta Coffee, Cotton. Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the New York Arabica Coffee, Copper and Orange Juice markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6008% higher; to see this index registered at 419.9071   The day starts with the U.S. Dollar steady, trading at 1.299 to Sterling, at 1.110 to the Euro and with the US Dollar buying 4.165 Brazilian Real. 

The London and New York markets started the day on Friday trading close to par on a modest positive note, both markets maintained this positive stance into the early afternoon trade. As the afternoon the London market started to attract buying support to move into positive territory and close on a modest positive note, while the New York market continued on its negative track to close on a modest soft note. 

The London market ended the day on a modest positive note, and with 62.5% of the earlier gains of the day intact, while the New York market ended the day on negative note, and with 50% of the earlier losses of the day intact. The New York market is closed today, and one might suspect that the London market shall be due for a slow and steady start for early trade today, against the prices set on Friday, as follows:  

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

MAR   1319 + 5                                                                  MAR   112.15 – 0.80

MAY   1337 + 4                                                                  MAY   114.45 – 0.80

JUL    1358 + 5                                                                  JUL     116.75 – 0.80

SEP    1378 + 6                                                                 SEP     118.85 – 0.80

NOV   1396 + 5                                                                  DEC    121.50 – 0.80

JAN    1414 + 5                                                                  MAR   123.95 – 0.75

MAR   1436 + 5                                                                  MAY   125.15 – 0.70

MAY   1459 + 5                                                                  JUL    126.20 – 0.65

JUL    1482 + 5                                                                  SEP    127.20 – 0.55