Coffee Market Report February 03 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 52.37% over the week of trade leading up to Tuesday 28th. January; to register a new net long position of 6,529 Lots which is the equivalent of 1,850,943 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 decrease their net short sold position within the market by 3.48% over the week of trade leading up to Tuesday 28th. January; to register a short-sold position of 24,379 Lots.  This net short sold position is the equivalent of 4,063,167 bags and has most likely been decreased, following the period of mixed though overall softer 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 January were 61,900 bags or 60.54% higher than the same month last year, at a total of 164,143 bags.  This contributes to the islands cumulative robusta coffee exports for the first four months of the present October 2019 to September 2020 coffee year to be 342,955 bags or 45.41% higher than the same period in the previous coffee year, at a total of 1,098,268 bags. 

The March to March contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 42.14 usc/Lb.  This equates to 41.05 % 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 2,878 bags on Friday; to register these stocks at 2,176,284 bags, with 89.3% of these certified stocks being held in Europe at a total of 1,944,458 bags and the remaining 10.7% being held in the USA at a total of 231,826 bags.  There was meanwhile a larger in number decrease by 8,740 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 13,411 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 Sugar, Coffee, Orange Juice, Corn and Gold markets ended the day on a positive note, the Silver market remained unchanged on the day, while the Oil, Natural Gas, Cocoa, Cotton, Copper, Wheat, and Soybean markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.5781% lower; to see this index registered at 397.6607   The day starts with the U.S. Dollar steady, trading at 1.317 to Sterling, at 1.108 to the Euro and with the US Dollar buying 4.283 Brazilian Real. 

The London and New York markets started the day on Friday trading on close to par on a modest positive note, , both markets retained this respective stance into the early afternoon trade. As the afternoon progressed both the London and the New York markets encountered buying support to move deeper into positive territory for the day, both markets hit a ceiling and dropped back marginally to end the day on a positive note. 

The London market ended the day on a positive note and with 85.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 65.71% of the earlier gains of the day intact.  This modest firm close might assist towards some degree of confidence and one might think the markets are due only 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   1334 + 30                                                                      MAR  102.65 + 1.15

MAY   1342 + 27                                                                      MAY   104.90 + 1.25

JUL    1361 + 26                                                                      JUL    107.15 + 1.20

SEP    1380 + 25                                                                      SEP    109.25 + 1.25

NOV   1399 + 25                                                                      DEC    112.05 + 1.30

JAN    1416 + 25                                                                      MAR   114.75 + 1.15

MAR   1435 + 24                                                                      MAY   116.25 + 1.05

MAY   1457 + 24                                                                      JUL     117.60 + 1.05

JUL    1482 + 24                                                                      SEP     118.80 + 1.10