Coffee Market Report April 28 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 21st. April; to register a new net long position of 21,995 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.37%, to register a net long position of 47,761 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net long position within this market by 2.65%, to register a new net long position of 10,079 Lots which is the equivalent of 2,857,352 bags.  This net long position has most likely been increased following the period of mixed trade but overall softer trade that since followed. 

The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of March were 132,476 bags or 38.38% higher than the same month last year, at a total of 477,561 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 have been 436,224 bags or 20.46% higher than the same period in the previous coffee year, at a total of 2,568,517 bags, this drastic increase in export for the month of March can be attributed to higher yields from new maturing coffee trees.  

Uganda’s governing authorities had subsequently taken a hard lockdown stance in reaction to Covid-19 leading to many sectors shutting down operations in April.  Although the restrictions that were imposed in this month are starting to show signs of easing.  There are continued resource challenges however, which are related to movement of personnel and cargo, that alike many other coffee producer countries with similar hard lockdown policies implemented over this time, may likely be experienced in lower year on year coffee export figures to be reported in months to come. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 54.04 usc/Lb.  This equates to 50.89% 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 151 bags yesterday; to register these stocks at 1,848,347 bags, with 90.6% of these certified stocks being held in Europe at a total of 1,675,053 bags and the remaining 9.4% being held in the USA at a total of 173,844 bags.  There was a larger in number 19,460 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,000 bags.  

The commodity markets were softer in trade yesterday, to see the overall macro commodity index taking a softer sideways track for the day. The Cocoa and London Robusta Coffee markets ended the day on a positive note, while the Sugar and New York Arabica Coffee markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.8490% lower; to see this index registered at 325.1848.   The day starts with the U.S. Dollar steady, trading at 1.242 to Sterling, at 1.085 to the Euro and with the US Dollar buying 5.653 Brazilian Real.     

The London and New York markets started the day yesterday trading around par on a modest positive note, both markets continued on this 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 deeper into positive territory only to hit a price ceiling and drop back from the highs of the day to see the New York market settle on a modest negative note and the London market settle on a modest positive note for the day. 

The London market ended the day on a modest positive note and with 50% of the earlier gains of the day intact, while the New York market ended the day on a modest note and with 64.71% of the earlier losses of the day intact. This mixed close does little to inspire confidence, albeit both markets gained momentum early in the day only to hit a ceiling a drop back and with the Brazil Real weaker against the US Dollar once again one might expect the markets are due for little 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    1150 + 6                                                                   JUL    106.20 – 0.55

SEP    1172 + 5                                                                    SEP   107.30 – 0.55

NOV   1191 + 4                                                                    DEC   109.05 – 0.55

JAN    1208 + 3                                                                    MAR  110.80 – 0.45 

MAR   1226 + 3                                                                    MAY  111.75 – 0.45 

MAY   1244 + 4                                                  JUL   112.80 – 0.40

JUL     1261 + 4                                                                     SEP    113.90 – 0.35

SEP    1282 + 4                                                  DEC  115.50 – 0.35