Coffee Market Report February 04 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 decrease their net long position within the market by 37.04% over the week of trade leading up to Tuesday 28th. January; to register a new net long position of 19,122 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 4.73%, to register a net long position of 56,397 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their net long position within the market by 52.37%; 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 Brazil government have reported that the country’s coffee exports for the month of January were 308,400 bags or 10.17% lower than the same month last year, at a total of 2,724,800 bags. The large decrease in reported exports for this month due to the larger biennial bearing production in 2018 coffee year, to similarly reflect the increased exports of Conilons robustas, to consumer markets over the same month in the previous year. 

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of January were 0.5% lower than the same month last year, at a total of 80,075 bags. This they say has contributed to the cumulative coffee exports for the first four months of the present October 2019 to September 2020 coffee year to be 14% lower than the same period in the previous coffee year, at a total of 141,241 bags. 

The National Coffee Institute of Honduras have reported that the country’s coffee exports for the month of January were 12.5% higher than the same month last year, at a total of 693,963 bags. This they say has contributed to the cumulative coffee exports for the first four months of the present October 2019 to September 2020 coffee year to be 2.5% higher than the same period in the previous coffee year, at a total of 1,215,374 bags. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 39.39 usc/Lb.  This equates to 40.23 % 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 538 bags yesterday; to register these stocks at 2,175,701 bags, with 89.4% of these certified stocks being held in Europe at a total of 1,944,458 bags and the remaining 10.6% being held in the USA at a total of 231,243 bags.  There was meanwhile no change 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 yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Sugar, Wheat and Soybean markets ended the day on a positive note, while the Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper, Orange Juice, Corn, Gold and Silver markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6768% lower; to see this index registered at 394.9692   The day starts with the U.S. Dollar steady, trading at 1.302 to Sterling, at 1.106 to the Euro and with the US Dollar buying 4.248 Brazilian Real. 

The London and New York markets started the day yesterday trading on close to par on a modest positive note, both markets encountered buying selling pressure to move deeper into negative territory into the early afternoon trade. As the afternoon progressed both the London and the New York markets continued on this downward track to accentuate the losses for the day and to close near to the lows of the day. 

The London market ended the day on a very negative note and with 97.7% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 97.9% of the earlier losses of the day intact.  This soft and lacklustre close does little to inspire confidence and one might think the markets are due for only 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   1290 – 44                                                                       MAR    97.90 – 4.75

MAY   1302 – 40                                                                       MAY   100.20 – 4.70

JUL    1321 – 40                                                                       JUL    102.50 – 4.65

SEP    1341 – 39                                                                       SEP    104.60 – 4.65

NOV   1360 – 39                                                                       DEC    107.45 – 4.60

JAN    1377 – 39                                                                       MAR   110.30 – 4.45

MAR   1397 – 38                                                                       MAY   111.90 – 4.35

MAY   1419 – 38                                                                       JUL     113.30 – 4.30

JUL    1443 – 39                                                                       SEP     114.60 – 4.20