Coffee Market Report

by | 08 Feb 2021

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector raised their net long position by 3.27% within the market over the week of trade leading up to Tuesday 2nd. February: to register a new net long position of 22,827 which is the equivalent of 6,471,353.  This net long position has most likely been marginally increased, following the period of mixed but overall, firmer sideways trade that has since followed.   

The Vietnam Customs Authority has reported that Vietnam’s coffee exports for the month of January were up by 10.20% from the same month in the previous year, to total 2,676,917 bags. This number proving to be substantially higher than the 2 million bags that had been initially forecast for the month’s coffee exports. Vietnam, the second largest coffee producing country and largest robusta coffee producer and exporter, reported coffee export revenue for January to be 12.90% higher than the same month in the previous year, at a total of around 280.60 million US Dollars. 

The March 2021 to March 2021 contract arbitrage between the London and New York markets widened on Friday: to register this at 63.72 usc/Lb. This equates to 51.18% 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 13,730 bags on Friday, to register these stocks at 1,652,245 bags, with 94.8% of these certified stocks being held in Europe at a total of 1,566,584 bags and the remaining 5.2% being held in the USA at a total 85,661 bags.  There was meanwhile a larger in number 19,0460 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 107,152 bags. 

It was a firmer day overall on the commodity markets on Friday, to see the overall macro commodity index taking something of a positive track for the day. The Sugar, Cocoa and New York Arabica Coffee markets ended the day on a positive note, while the London Robusta Coffee Market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.80% higher; to see this index registered 480.43.  The day starts with the U.S. Dollar, trading at 1.373 Sterling, at 1.204 the Euro and with the US Dollar buying 5.370 Real.

The New York and London markets started the day on Friday trading on a modest firmer note, both markets continued to oscillate around par, taking something of a firmer track for the remainder of the morning session. As the afternoon progressed the New York market attracted a large degree of buying support to see the market hit a ceiling limiting the gains for the day, while the London market continued to trade around par. The New York market dropped back from the highs of the day to see the market settle on a modest firmer note, while the London market continued to trade around par towards the close, to see the market settle on a modest softer note for the day. 

The London market ended the day on a modest negative note with 37.50% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 25% of the earlier gains of the day intact. This mixed close, albeit that the London market settled near to unchanged for the day might inspire some degree of confidence to possibly set the markets for 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.                                                           

MAR    1340 – 3                                     MAR    124.50 + 0.45

MAY     1359 Unch                                 MAY     126.65 + 0.50

JUL      1372 Unch                                 JUL     128.55 + 0.45

SEP     1387 + 1                                     SEP     130.40 + 0.50

NOV     1403 + 1                                     DEC     132.35 + 0.55

JAN     1418 + 1                                     MAR    133.95 + 0.55

MAR    1435 + 1                                     MAY    134.65 + 0.55

MAY     1451 + 1                                     JUL        134.10 + 0.45