Coffee Market Report May 18 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector increase their net long position within the market by 45.12% over the week of trade leading up to Tuesday 12th May; to register a new net long position of 5,283 Lots which is the equivalent of 1,497,707 bags.  This net long position has most likely been increased, following the period of mixed but overall sideways trade that since followed.  

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market increase their net short sold position within the market by 1.54% over the week of trade leading up to Tuesday 12th May; to register a short-sold position of 34,569 Lots.  This net short sold position is the equivalent of 5,761,500 bags and has most likely been little changed following the period of mixed but overall sideways trade that has since followed.  

The Green Coffee Association of the U.S.A. have announced that the country’s port warehouse stocks increased by 494,299 bags or 8.21% during the month of April, to register these stocks at 6,517,867 bags at the end of the month.   The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 595,000 bags per week, would conservatively have been at least 1.2 million bags.  These cumulative coffee stocks would indicate that there is a steady level of comfort of just over twelve weeks of overall supply available to fuel these two countries’ combined coffee consumption.

 The July to July contracts arbitrage between the London and New York markets narrowed on Friday; to register this at 52.42 usc/Lb.  This equates to 49.06% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were decrease by 595 bags on Friday; to register these stocks at 1,789,541 bags, with 90.7% of these certified stocks being held in Europe at a total of 1,623,998 bags and the remaining 9.3% being held in the USA at a total of 165,543.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 13,359 bags.  

The commodity markets were firmer in trade on Friday, to see the overall macro commodity index taking a sideways track for the day. The Coffee markets ended the day on a positive note, while the Sugar and Cocoa markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.0636% higher; to see this index registered at 345.5258.   The day starts with the U.S. Dollar steady, trading at 1.210 to Sterling, at 1.082 to the Euro and with the US Dollar buying 5.854 Brazilian Real.   

The London and New York markets started the day on Friday trading on a positive note, both markets maintained this firm stance into the early afternoon trade. As the afternoon progressed the New York market dropped off the highs of day to trade on a modest positive note, while the London market followed suit albeit in a more sedate manner to also trade on a modest positive track for the remainder of the day. 

The London market ended the day on a positive note and with 50% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note falling back from the highs of the day to settle with 2% of the earlier gains of the day intact. This modest positive close does little to indicate direction and one might expect the markets are due little better than a hesitant steady start to early trade today, against the prices set on Friday, as follows:   

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

JUL    1178 + 10                                                                   JUL    106.85 + 0.15

SEP    1197 + 9                                                                     SEP   108.00 + 0.05

NOV   1215 + 10                                                                   DEC   109.75 – 0.05

JAN    1234 + 9                                                                      MAR  111.55 – 0.10 

MAR   1252 + 8                                                                      MAY  112.50 – 0.15 

MAY   1269 + 6                                                    JUL   113.50 – 0.20

JUL     1286 + 6                                                                      SEP    114.50 – 0.25

SEP    1304 + 6                                                    DEC  115.85 – 0.25