Coffee Market Report February 24 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this increase their net short sold position within the market by 12.92% over the week of trade leading up to Tuesday 18th. February; to register a new net short position of 16,523 Lots which is the equivalent of 4,684,197 bags.  This position has most likely been further increased, following the period of mixed but overall sideways 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 5.5% over the week of trade leading up to Tuesday 18th. February; to register a short-sold position of 39,604 Lots.  This net short sold position is the equivalent of 6,600,667 bags and has most likely been increased, following the period of mixed though overall softer trade that has since followed. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 135,245 bags or 2.07% during the month of January, to register these stocks at 6,669,473 bags at the end of the month.   The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 595,000 bags per week, would conservatively have been at least 1.2 million bags. 

Suggesting that if one is to consider the additional unreported stocks the end month stocks, this would equate to close to fourteen weeks of roasting activity, which most would consider to be a very safe reserve. 

The March to March contracts arbitrage between the London and New York markets broadened on Friday; to register this at 51.47 usc/Lb.  This equates to 47.29% 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 946 bags on Friday; to register these stocks at 2,162,327 bags, with 89.6% of these certified stocks being held in Europe at a total of 1,938,176 bags and the remaining 10.4% being held in the USA at a total of 224,151 bags.  There was meanwhile a larger in number decrease by 2,279 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,025 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, Copper, Orange Juice, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Cocoa, Cotton, Wheat, Corn and Soybean markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2209% higher; to see this index registered at 408.2697.   The day starts with the U.S. Dollar steady, trading at 1.294 to Sterling, at 1.082 to the Euro and with the US Dollar buying 4.388 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 progressed the New York market started to gain some buying support to move deeper into positive territory for the day and to close on a very positive note, while the London market maintained a modest positive track to close near to the highs of the day. 

The London market ended the day on a positive note and with 77.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 86.1% of the earlier gains of the day intact.  This positive close might inspire some degree of confidence, although with the Brazil Carnival which started on the 21st February and is due to end on the 26th February, one might expect the markets will be subdued or mildly buoyant with a lack of active sales from this leading producer, this might set the markets for 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   1265 + 14                                                                      MAR  108.85 + 5.25

MAY   1296 + 17                                                                      MAY  110.25 + 5.30

JUL    1313 + 17                                                                      JUL    112.35 + 5.25

SEP    1331 + 16                                                                     SEP    114.20 + 5.15

NOV   1347 + 15                                                                      DEC   116.75 + 5.10

JAN    1362 + 15                                                                      MAR  119.00 + 5.05

MAR   1376 + 14                                                                      MAY  120.20 + 5.05

MAY   1395 + 15                                                                      JUL    121.25 + 5.00

JUL    1417 + 16                                                                      SEP    122.30 + 4.95