Coffee Market Report March 17 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 further extend their net long position within the market over the week of trade leading up to Tuesday 10th.March; to register a new net long position of 3,520 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.3%, to register a net long position of 50,995 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within the market by 54.9%; to register a new net short position of 1,7733 Lots which is the equivalent of 502,071 bags.  This position has most likely been further decreased, following the period of negative trade that has since followed. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 150,126 bags or 2.25% during the month of February, to register these stocks at 6,519,347 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 May to May contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 48.52 usc/Lb.  This equates to 46.70% 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 2,178 bags yesterday; to register these stocks at 2,095,906 bags, with 90% of these certified stocks being held in Europe at a total of 1,886,212 bags and the remaining 10% being held in the USA at a total of 209,694 bags.  There was meanwhile a larger in number decrease by 4,638 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,200 bags. 

The commodity markets were very soft in trade yesterday, to see overall macro commodity index taking a negative track for the day. The Sugar, Cocoa and Coffee markets ended the day on a negative note, The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 4.7132% lower; to see this index registered at 333.2629.   The day starts with the U.S. Dollar steady, trading at 1.225 to Sterling, at 1.117 to the Euro and with the US Dollar buying 5.002 Brazilian Real. 

The London and New York markets started the day yesterday trading on a negative note, both markets continued on this softer track into the early afternoon trade. As the afternoon progressed both the London and the New York markets started to attract buying support to move into positive territory for the day only to hit a ceiling and drop back and close on a negative note for the day. 

The London market ended the day on a negative note and with 71.4% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 91.9% of the earlier losses of the day intact.  This soft and lacklustre close does little to inspire anything in the way of confidence and with the Brazil Real hitting a record low late in the day yesterday one might not expect better than a hesitant start for early trade today, against the prices set yesterday, as follows: 

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

MAY   1221 – 20                                                                          MAY  103.90 – 2.85

JUL    1242 – 16                                                                          JUL    105.50 – 2.95

SEP    1262 – 15                                                                         SEP    107.05 – 3.15

NOV   1279 – 17                                                                          DEC   109.30 – 3.30

JAN    1297 – 15                                                                          MAR  111.30 – 3.30

MAR   1311 – 15                                                                          MAY  112.40 – 3.25

MAY   1325 – 15                                                                          JUL    113.35 – 3.15

JUL    1344 – 15                                                                          SEP    114.15 – 3.20