Coffee Market Report February 17 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this market turn their net long position within this market to a net short position at the start of February and this net short position was extended by 12,534 Lots over the week of trade leading up to Tuesday 11th February; to register a new net short position of 14,632 Lots which is the equivalent of 9,145,142 bags.  This net short sold position may have been trimmed, following the period of mixed but overall firmer 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 10,277 Lots, over the week of trade leading up to Tuesday 11th February; to register a short-sold position of 37,547 Lots, or the equivalent of 6,257,833 bags.

The March to March contracts arbitrage between the London and New York markets widened on Friday; to register this at 51.74 /usc/Lb.  This equates to 46.47% 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 1,832 bags on Friday; to register these stocks at 2,163,109 bags, with 89.59% of these certified stocks being held in Europe at a total of 1,937,833 bags and the remaining 10.41% being held in the USA at a total of 225,276 bags.  The greatest percentage of these certified coffees hail from Honduras, at a respectable 71.32% of total Certified Stocks being held in both European and American Certified warehouses.  There was meanwhile a decrease by 4,547 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,546 bags.

The commodity markets were mixed in trade on Friday, as the latest developments and news of greater than was earlier reported cases of the coronavirus reaching the markets, creating uncertainty within the commodity sector in relation to this second largest economy.  It was a similarly unsteady week overall for the commodity markets as the seeming rise of geopolitical tensions within the Middle East and USA to fuel speculative sentiment within the Energy sector.  It was a positive day for the Oil markets, Coffee, safe haven Gold and Silver markets.  The rest of the board finished in mostly negative territory and a softer close for Cocoa, Cotton, Copper, Wheat, Corn, Soybean, Sugar, Platinum and Palladium markets.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1586% higher; to see this index registered at 402.9165.   The day starts with the U.S. Dollar steady, trading at 1.304 to Sterling, at 1.083 to the Euro and with the US Dollar buying 4.29 Brazilian Real.

The New York market will be closed today, as USA observes a national Presidents’ Day holiday and thus, London will be trading solo on opening later today.

The London and New York markets started the day below par on Friday, the early morning session slow in London but with a degree of volume to come to the floor from the outset, in New York.  The lower morning session tested the lows of the day in both markets, where the floor met with additional commercial buying activity, to further boost confidence within the speculative sector and in New York volume turned swiftly to the buy side triggering stops as the New York market lept ahead in the morning session.  The London market following suite although in steady volumes, outpaced by the performance within the New York market.  This latter market reached to the highs of the day around midsession with the ensuing selling activity weighing in to cap the ceiling, with a choppy afternoon session ensuing, well above par but off of the days earlier high. 

The afternoon session in London in comparatively lower volumes of trade that had seen this market touch the high around midsession trading above par, slipped back to briefly be below par as the afternoon moved toward the close.  The London market found last minute support to spark a recovery in the session, to see this market close the day in positive territory.  The later afternoon session in New York within the new range slipped lower, though with another push upward toward the end of the day, with first notice day ahead for the prompt month, on 20th February.  The close in New York set narrowly below the days’ high attained and after a buoyant and comparatively hefty volume day in New York, the markets set the close in positive territory on Friday, as follows: 

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

MAR   1287 + 11                                   MAR 109.10 + 4.65
MAY   1314 + 13                                   MAY  111.35 + 4.65
JUL    1330 + 13                                   JUL   113.40 + 4.65
SEP    1346 + 13                                   SEP  115.45 + 4.70
NOV   1362 + 13                                   DEC  118.10 + 4.70
JAN    1379 + 12                                   MAR 120.65 + 4.70
MAR   1395 + 11                                   MAY 121.95 + 4.60
MAY   1413 + 12                                   JUL   123.15 + 4.55
JUL    1433 + 12                                   SEP   124.30 + 4.55