Coffee Market Report January 30 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net long position within the market by 34.45% during the week of trade leading up to Tuesday 24th January; to register a net long position of 25,281 Lots on the day.  This net long position which is the equivalent of 7,167,051 bags has most likely been further increased, following the period of mixed but overall more positive trade, which has since followed.
The Uganda Coffee Development Authority UCDA have reported that the countries robusta coffee exports for the month of December were 82,022 bags or 23.95% higher than the same month last year, at a total of 424,440 bags, the increase in output is attributed to favourable weather during crop development and harvesting  .  This contributed to the countries cumulative coffee exports for the first three months of the new October 2016 to September 2017 coffee year to being 227,074 bags higher than the same period in the previous coffee year, at a total of 1,041,622 bags.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 52.84 usc/Lb., while this equates to 34.11% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 649 bags on Friday; to register these stocks at 1,288,026 bags.  The certified stocks reported an increase of 1,004 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,348 bags.
It was another mixed day for the commodity markets on Friday, as the US Dollar registered positive gains against a basket of other major currencies.  This while the oil markets influenced by market data suggesting increased drilling activity in the U.S.A., faltered on the day.  It was a generally firmer day for Coffee, Cotton, Copper, Orange Juice, Silver, Platinum and Palladium, whereas a softer day for Cocoa, Sugar, Corn, Wheat, Soybean and Gold markets.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1865% higher, to see this Index registered at 430.63.   The day starts with the U.S. Dollar near to steady and trading at 1.256 to Sterling and 1.072 to the Euro, while North Sea Oil is softer in early trade and is selling at $ 54.64 per barrel.
 
The London and New York markets started the day in mildly positive territory in London on Friday and a softer note in New York.  The absence of producer sellers in London with Vietnam celebrating Tet New Year, continued to provide a degree of support to this market which although in a narrow range for much of the morning session, remained in positive territory.  Following the negative start to the day in New York, this market managed a recovery to unchanged by mid morning and the rest of the day in both markets spent in choppy positive territory.  The volume of trade in London fairly modest, to see this market finish the day near to the days high.  The New York market had a fair volume day while the latter session held within a tight range, this market gave back some of the gains toward the end of the day, to finish in positive territory but off the day’s high, to set the close on Friday, as follows:
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
JAN      2253 + 31   
MAR     2238 + 28                                               MAR   152.40 + 0.95
MAY     2250 + 27                                               MAY   154.90 + 0.95
JUL      2256 + 26                                                JUL    157.20 + 0.90
SEP      2260 + 28                                               SEP    159.45 + 0.90
NOV     2261 + 29                                                DEC   162.55 + 0.95
JAN      2259 + 29                                               MAR   165.45 + 0.95
MAR     2258 + 29                                               MAY   167.10 + 1.00
MAY     2260 + 29                                               JUL    168.60 + 0.95
JUL      2270 + 29                                               SEP    170.10 + 0.90