Coffee Market Report February 25 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 increase their net short position within the market by 20.16% over the week of trade leading up to Tuesday 18th. February; to register a new net short position of 16,655 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.7%, to register a net long position of 46,584 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 12.92%; 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 Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of January were 75,014 bags or 18.99% higher than the same month last year, at a total of 469,951 bags. This has contributed to the country’s cumulative coffee exports for the first four months of the present October 2019 to September 2020 coffee year to have been 153,556 bags or 10.48% higher than the same period in the previous coffee year, at a total of 1,617,582 bags, this drastic increase in export for the month of January can be attributed to higher yields from new maturing trees and favourable weather conditions within the coffee growing regions. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 49.65 usc/Lb.  This equates to 46.88% 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 2,106 bags yesterday; to register these stocks at 2,164,433 bags, with 89.7% of these certified stocks being held in Europe at a total of 1,940,676 bags and the remaining 10.3% being held in the USA at a total of 223,757 bags.  There was meanwhile a larger in number decrease by 3,025 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 0 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a downward track for the day. The Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, 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 1.7562% lower; to see this index registered at 401.0995.   The day starts with the U.S. Dollar steady, trading at 1.294 to Sterling, at 1.086 to the Euro and with the US Dollar buying 4.388 Brazilian Real. 

The London and New York markets started the day yesterday trading on a negative note, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the New York market started to attract selling pressure to move deeper into negative territory for the day and to close on a very negative note, while the London market maintained a modest soft track to close near to the lows of the day. 

The London market ended the day on a negative note and with 83.3% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 49.6% of the earlier losses of the day intact.  This softer close for the markets is unlikely to inspire confidence and one might think the markets are due for only a hesitant start for early trade today, against the prices set yesterday, as follows:   

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

MAR   1240 – 25                                                                       MAR  105.90 – 2.95

MAY   1273 – 23                                                                       MAY  106.90 – 3.35

JUL    1293 – 20                                                                       JUL    109.05 – 3.30

SEP    1312 – 19                                                                      SEP    111.00 – 3.20

NOV   1329 – 18                                                                       DEC   113.65 – 3.10

JAN    1345 – 17                                                                       MAR  116.05 – 2.95

MAR   1360 – 16                                                                       MAY  117.30 – 2.90

MAY   1381 – 14                                                                       JUL    118.50 – 2.75

JUL    1402 – 15                                                                       SEP    119.60 – 2.70