The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net long position within the market by a marginal 238 lots in the week of trade leading up to Tuesday 31st January; to register a net long position of 25,043 Lots on the day. This net long position which is the equivalent of 7,099,580 bags has most likely been further decreased, following the period of mixed but overall more negative trade, which has since followed.
The Coffee Federation in Colombia have reported that the country’s coffee production for the month of January were 139,000 bags or 12.24% higher than the same month in the previous year, at a total of 1,275,000 bags. This has contributed to the countries cumulative production the first four months of the new October 2016 to September 2017 coffee year to being 362,000 bags or 6.86% higher than the same period in the previous coffee year, at a total of 5,642,000 bags.
In terms of exports, the Coffee Federation in Colombia have reported that the country’s coffee exports for the month of January were 19,000 bags or 1.71% higher than the same month in the previous year, at a total of 1,128,000 bags. This improved performance contributes to the countries cumulative exports for the first four months of the new October 2016 to September 2017 coffee year to being 525,000 bags or 11.49% higher than the same period in the previous coffee year, at a total of 5,096,000 bags.
The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 48.55 usc/Lb., while this equates to 32.66% price discount for the London robusta coffee market. This relatively narrow arbitrage is now becoming less of an attractive factor for the roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,403 bags on Friday; to register these stocks at 1,304,953 bags. The certified stocks reported a relatively steep decrease of 7,845 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,616 bags.
The commodity markets were mixed on Friday, as market sentiment fluctuated between the latest and positively received employment data from the States, but with uncertainty in the new administrations fiscal policies to see the US Dollar lose further ground on the day. It was a firmer day for Oil, Sugar and Gold markets, a relatively flat close in arabica Coffee and a softer day for Cotton, Copper, Cocoa, robusta Coffee, Soybean, Corn, Wheat, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.2753% lower, to see this Index registered at 430.08. The day starts with the U.S. Dollar trading at 1.249 to Sterling and steady at 1.077 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.96 per barrel.
The coffee markets started the day on Friday on a softer note, with levels in New York posting a negative start although with a degree of buoyancy in the speculative and spread activity, to maintain a narrow range for the first few hours of the day. The physical selling activity within the newly active Vietnam lead to a continuation of the softer trend in London on Friday and this market gapped lower on opening, to spend much of the morning session and into the afternoon below the opening and in a narrow range. There was however a recovery noted in London toward the latter end of the day as this market managed to clamber back into positive territory but with renewed selling taking hold of the market as the day drew to a close to see London robusta finish the day on a softer note. The New York arabica market demonstrated a stronger performance on the day with this market recovered by midmorning and trading back to positive territory where sentiment on either side lead to a choppy latter day session and the positive stance was maintained through to the latter half of the afternoon, to slip back toward the close as support dwindled toward the end of the day, New York set a close in a marginally positive finish after a good volume day, to set the prices in both markets at the close, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAR 2177 – 8 MAR 146.25 + 0.30
MAY 2197 – 4 MAY 148.70 + 0.30
JUL 2208 – 3 JUL 151.05 + 0.25
SEP 2212 – 4 SEP 153.35 + 0.25
NOV 2214 – 4 DEC 156.55 + 0.30
JAN 2213 – 4 MAR 159.45 + 0.30
MAR 2212 – 4 MAY 161.15 + 0.30
MAY 2214 – 4 JUL 162.65 + 0.30
JUL 2224 – 4 SEP 164.10 + 0.30
SEP 2234 – 4 DEC 166.30 + 0.35