Coffee Market Report April 06 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net long position within the market by 355% over the week of trade leading up to Tuesday 31st. March; to register a new net long position of 8,840 Lots which is the equivalent of 2,506,101 bags.  This net long position has most likely been further extended, 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 0.81% over the week of trade leading up to Tuesday 31st. March; to register a short-sold position of 30,119 Lots.  This net short sold position is the equivalent of 5,019,833 bags and has most likely been reduced following the period of mixed, softer trend in trade that has since followed.  

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of March was 108,000 bags or 11.81% lower than the same month last year, at a total of 806,000 bags.   This has contributed to the countries cumulative production for the first six months of the present October 2019 to September 2020 coffee year to be 427,000 bags or 6.11% higher than the same period in the previous coffee year, at a total of 7,412,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of March were 240,000 bags or 21% lower than the same month last year, at a total of 903,000 bags.   This has contributed to the country’s cumulative coffee exports for the first six months of the present October 2019 to September 2020 coffee year to be 390,000 bags or 5.66% lower than the same period in the previous coffee year, at a total of 6,499,000 bags. 

The July to July contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 61.12 usc/Lb.  This equates to 52.46% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday; to register these stocks at 1,947,460 bags, with 90.4% of these certified stocks being held in Europe at a total of 1,760,178 bags and the remaining 9.6% being held in the USA at a total of 187,282 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,653 bags.  

The commodity markets were firmer in trade on Friday, to see overall macro commodity index taking an upwards sideways track for the day. The Cocoa and Sugar markets ended the day on a positive note, while the Coffee markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2533% higher; to see this index registered at 334.2271.   The day starts with the U.S. Dollar steady and showing some degree of buoyancy, trading at 1.227 to Sterling, at 1.082 to the Euro and with the US Dollar buying 5.350 Brazilian Real.    

The London and New York market started the day on Friday trading close to par on a modest softer note, both markets attracted selling pressure to move into negative territory for the early afternoon trade. As the afternoon progressed both the London and the New York markets attracted further selling pressure to move deeper into negative territory, to close on a softer note for the day.  

The London market ended the day on a negative note and with 73.68% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 86.8% of the earlier losses of the day intact.  This softer close does little to indicate direction and with the Brazil Real weaker once again, one might not expect better than a hesitant steady start to early trade today, against the prices set on Friday, as follows:  

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

JUL    1220 – 14                                                                         JUL    116.50 – 4.20 

SEP    1241 – 15                                                                        SEP   117.60 – 4.10 

NOV   1260 – 14                                                                        DEC   118.80 – 4.10

JAN    1280 – 13                                                                        MAR  119.90 – 4.10 

MAR   1297 – 10                                                                        MAY  120.65 – 4.25  

MAY   1311 – 12                                                                     JUL    121.40 – 4.25 

JUL    1326 – 16                                                                        SEP    122.35 – 4.20 

SEP   1345 – 16                                                     DEC  123.90 – 4.05