Coffee Market Report May 12 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 5th. May; to register a new net long position of 12,351 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.17%, to register a net long position of 45,031 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 43.12%, to register a new net long position of 3,638 Lots which is the equivalent of 1,031,357 bags.  This net long position has most likely been largely decreased, for the second consecutive week, following the period of mixed but overall softer trade that since followed. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 56.41 usc/Lb.  This equates to 50.93% 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 3,034 bags yesterday; to register these stocks at 1,804,532 bags, with 90.7% of these certified stocks being held in Europe at a total of 1,637,338 bags and the remaining 9.3% being held in the USA at a total of 167,194.  There was meanwhile a larger in number decrease by 3,206 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 13,359 bags.  

The commodity markets were softer in trade yesterday, to see the overall macro commodity index taking a negative 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 1.0925% lower; to see this index registered at 342.405.   The day starts with the U.S. Dollar steady, trading at 1.233 to Sterling, at 1.081 to the Euro and with the US Dollar buying 5.817 Brazilian Real.   

The London and New York markets started the day yesterday trading close to par on a positive note, both markets continued on their respective firm track into the early afternoon trade. As the afternoon progressed the New York market dropped back from the highs of the day and with selling pressure buoyed by the weaker Brazil Real moved into negative territory for the afternoon, to see the market close on a negative note. The London market maintained its positive momentum to see the market close on a modest positive note for the day. 

The London market ended the day on a positive note and with 60% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 45% of the earlier losses 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    1198 + 12                                                                    JUL    110.75 – 0.90

SEP    1218 + 12                                                                    SEP   111.85 – 0.85

NOV   1235 + 10                                                                     DEC   113.45 – 0.90

JAN    1255 + 10                                                                     MAR  115.15 – 1.00 

MAR   1272 + 9                                                                       MAY  116.05 – 0.95 

MAY   1290 + 7                                                     JUL   117.00 – 0.85

JUL     1307 + 7                                                                       SEP    117.90 – 0.80

SEP    1328 + 7                                                     DEC  119.15 – 0.70