Coffee Market Report April 07 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 long position within the market over the week of trade leading up to Tuesday 31st.March; to register a new net long position of 20,621 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.82%, to register a net long position of 47,383 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market extend their net long position within this market by 355%, 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.  

Reuters have reported that weather conditions over south east Brazil in the main coffee districts are presently dry and marginally cooler than the historical average for this time of year, with the forecasts for these conditions to remain for the coming two weeks. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday; to register this at 62.52 usc/Lb.  This equates to 53.03% 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 9,407 bags yesterday; to register these stocks at 1,956,867 bags, with 90.5% of these certified stocks being held in Europe at a total of 1,771,585 bags and the remaining 9.5% being held in the USA at a total of 185,282 bags.  There was meanwhile a larger in number decrease by 26,788 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 17,865 bags.  

The commodity markets were firmer in trade yesterday, to see overall macro commodity index taking an upwards sideways track for the day. The Cocoa and London Robusta Coffee markets ended the day on a positive note, while the New York Arabica Coffee and Sugar markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.4082% higher; to see this index registered at 338.9338.   The day starts with the U.S. Dollar steady , trading at 1.228 to Sterling, at 1.083 to the Euro and with the US Dollar buying 5.286 Brazilian Real.    

The London and New York markets started the day yesterday trading on a negative note, both markets continued on this soft track into the early afternoon trade. As the afternoon progressed the New York market started to attract buying support to climb into positive territory with the London market following suit in a more sedate manner. Both markets hit a ceiling and dropped back from the highs of the day to see the New York market close on a positive note for the day and the London market close on a modest, close to par positive note for the day. 

The London market ended the day on a modest positive note and with 10% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 71.8% of the earlier gains of the day intact. The London market closed marginally positive for the day, although further down the board remained near to unchanged for the day. This close might assist towards some degree of confidence to possibly set the markets for slightly better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:  

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

JUL    1221 + 1                                                                         JUL    117.90 + 1.40 

SEP    1239 – 2                                                                        SEP   118.95 + 1.35 

NOV   1257 – 3                                                                        DEC   120.20 + 1.40

JAN    1275 – 5                                                                        MAR  121.45 + 1.55 

MAR   1291 – 6                                                                        MAY  122.35 + 1.70  

MAY   1305 – 6                                                                     JUL    123.20 + 1.80 

JUL    1320 – 6                                                                        SEP    124.10 + 1.75 

SEP   1339 – 6                                                     DEC  125.55 + 1.65