Coffee Market Report March 31 2020

30th. March 2020. 

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector turn their net short sold position within the market to a new net long position within the market over the week of trade leading up to Tuesday 24th. March; to register a new net long position of 1,942 Lots which is the equivalent of 550,548 bags.  This net long position has most likely been reduced, following the period of mixed trade though toward the latter half of the week, overall softer trade that since followed. 

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market decrease their net short sold position within the market by 18.9% over the week of trade leading up to Tuesday 24th. March; to register a short-sold position of 30,365 Lots.  This net short sold position is the equivalent of 5,060,833 bags and has most likely been extended following the period of mixed, softer trend in trade that has since followed. 

With the month of March coming to a close and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of March shall be approximately 2,500,000 bags.  This they say, shall result in the countries coffee exports for the first three months of this year to be 7.8% lower than the same period last year, at a total of 7,330,000 bags. 

The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first three months of this year, shall be 23.2% lower than the same period last year, at a total of 653 million U.S. dollars.   One would speculate that this much sharper drop in the value of the Vietnam coffee exports for the first three months of this year is more the reason for the percentage fall in the volume of coffee exports, than being related to coffee supply from the new crop. 

The May to May contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 61.05 usc/Lb.  This equates to 52.70% 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 8,696 bags on Friday; to register these stocks at 2,007,861 bags, with 90.5% of these certified stocks being held in Europe at a total of 1,817,329 bags and the remaining 9.5% being held in the USA at a total of 190,532 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,157 bags. 

The commodity markets were softer in trade on Friday, to see overall macro commodity index taking a soft sideways track for the day.The Cocoa, Coffee and Sugar markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.4178% lower; to see this index registered at 341.5676.   The day starts with the U.S. Dollar steady, trading at 1.241 to Sterling, at 1.108 to the Euro and with the US Dollar buying 5.100 Brazilian Real. 

The London and New York markets started the day on Friday trading on a negative note, both markets continued on this soft track into the early afternoon trade. As the afternoon progressed both the London and the New York markets recovered slightly but the buoy in the markets was short lived as both markets started to attract selling pressure to move deep into negative territory towards the close. 

The London market ended the day on a negative note and with 100% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 97.8% of the earlier losses of the day intact.  This soft and lacklustre close provides little indication for direction, but with a weaker Brazil Real in play, one would think that this will impact upon sentiment and set the markets for little better than a near to steady start for early trade today, against the prices set on Friday, as follows: 

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

MAY   1209 – 32                                                                       MAY  115.85 – 8.80 

JUL    1244 – 34                                                                       JUL    116.75 – 7.40 

SEP    1265 – 34                                                                       SEP   117.25 – 7.35  

NOV   1280 – 33                                                                       DEC   118.30 – 6.85 

JAN    1295 – 28                                                                       MAR  119.75 – 6.65 

MAR   1309 – 25                                                                      MAY  120.80 – 6.70 

MAY   1325 – 24                                                                       JUL    121.55 – 6.90 

JUL    1345 – 24                                                                       SEP    122.30 – 7.10