Coffee Market Report March 02 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector of this decrease their net short sold position within the market by 1.8% over the week of trade leading up to Tuesday 25th. February; to register a new net short position of 16,229 Lots which is the equivalent of 4,600,850 bags.  This position has most likely been marginally decreased, 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 3.27% over the week of trade leading up to Tuesday 25th. February; to register a short-sold position of 40,899 Lots.  This net short sold position is the equivalent of 6,816,500 bags and has most likely been increased, following the period of mixed though overall softer trade that has since followed. 

The Indonesian government trade data from Sumatra, which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of February were 67,986 bags or 50.5% higher than the same month last year, at a total of 202,498 bags.  This contributes to the islands cumulative robusta coffee exports for the first five months of the present October 2019 to September 2020 coffee year to be 410,942 bags or 46.18% higher than the same period in the previous coffee year, at a total of 1,300,767 bags. 

The May to May contracts arbitrage between the London and New York markets broadened on Friday; to register this at 53.20 usc/Lb.  This equates to 47.73% 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 1,266 bags on Friday; to register these stocks at 2,139,149 bags, with 89.6% of these certified stocks being held in Europe at a total of 1,916,933 bags and the remaining 10.4% being held in the USA at a total of 222,216 bags.  There was meanwhile no change 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 on Friday, to see overall macro commodity index taking a soft sideways track for the day. The Natural Gas, New York Arabica Coffee, Orange Juice and Corn markets ended the day the day on a positive note, while the Oil, Sugar, Cocoa, London Robusta Coffee, Cotton, Copper, Wheat, Soybean, 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 1.89% lower; to see this index registered at 380.7395.   The day starts with the U.S. Dollar steady, trading at 1.284 to Sterling, at 1.105 to the Euro and with the US Dollar buying 4.473 Brazilian Real. 

The London and New York markets started the day on Friday trading on modest negative note, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the New York market started to attract buying support to move into positive territory, while the London market continued on a soft track to close on a modest negative note. 

The London market ended the day on a modest negative note and with 33.3% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 64% of the earlier gains of the day intact.  This mixed close might inspire some degree of confidence and with the Brazil Real slightly weaker one might expect the markets are due 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   1257 Unch                                                                    MAR  110.10 + 1.90

MAY   1283 – 6                                                                        MAY  111.35 + 1.60

JUL    1302 – 6                                                                        JUL    113.25 + 1.55

SEP    1321 – 6                                                                       SEP    115.00 + 1.55

NOV   1339 – 5                                                                        DEC   117.35 + 1.50

JAN    1355 – 4                                                                        MAR  119.45 + 1.50

MAR   1371 – 1                                                                        MAY  120.70 + 1.55

MAY   1392 Unch                                                                    JUL    121.80 + 1.50

JUL    1413 Unch                                                                    SEP    122.85 + 1.45