Coffee Market Report May 05 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 decrease their net long position within the market over the week of trade leading up to Tuesday 28th. April; to register a new net long position of 15,965 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 5.88%, to register a net long position of 44,954 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their net long position within this market by 36.52%, to register a new net long position of 6,398 Lots which is the equivalent of 1,813,805 bags.  This net long position has most likely been largely decreased following the period of mixed but overall softer trade that since followed. 

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of April were 11.2% higher than the same month last year, at a total of 150,279 bags. This they say has contributed to the cumulative coffee exports for the first seven months of the present October 2019 to September 2020 coffee year to be 1% lower than the same period in the previous coffee year, at a total of 553,276 bags. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday; to register this at 52.99 usc/Lb.  This equates to 49.35% 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 1,000 bags yesterday; to register these stocks at 1,818,813 bags, with 90.6% of these certified stocks being held in Europe at a total of 1,648,427 bags and the remaining 9.4% being held in the USA at a total of 170,386.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,515 bags. 

The commodity markets were marginally firmer in trade yesterday, to see the overall macro commodity index taking a positive sideways track for the day. The New York Arabica Coffee market ended the day on a positive note, While the Sugar, Cocoa and London Robusta Coffee markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2170% higher; to see this index registered at 338.6326.   The day starts with the U.S. Dollar steady, trading at 1.247 to Sterling, at 1.091 to the Euro and with the US Dollar buying 5.542 Brazilian Real.     

The London and New York markets started the day trading close to par on a modest negative note, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the London market continued on a negative track for much of the afternoon trade albeit recovering slightly late in the day to close on a modest negative note, while the New York market attracted buying support to buoy the market and gain momentum late in the day, the New York market hit a ceiling and dropped back late in the day to close on a positive note for the day. 

The London market ended the day on a modest negative note and with 33.33% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 50% of the earlier gains of the day intact. This mixed close does little to indicate direction and with the Brazil Real still trading soft to the US Dollar one might think the markets are due 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    1197 – 8                                                                    JUL    107.20 + 1.10

SEP    1218 – 8                                                                    SEP   108.45 + 1.20

NOV   1238 – 6                                                                     DEC   110.30 + 1.20

JAN    1257 – 5                                                                     MAR  112.25 + 1.25 

MAR   1275 – 4                                                                     MAY  113.45 + 1.20 

MAY   1292 – 4                                                   JUL   114.65 + 1.20

JUL     1309 – 4                                                                     SEP    115.80 + 1.15

SEP    1329 – 4                                                   DEC  117.35 + 1.10