Coffee Market Report

by | 23 Feb 2021

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 this market by 7.65% over the week of trade leading up to Tuesday 16th. February; to register a new net long position of 21,059 lots. Meanwhile the longer term in nature Index Fund sector of this market cut their net long position within the market by 0.23%, to register a net long position of 74,664 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market cut their net long position within the market by 1.51% to register a new net long position of 19,454 Lots which is the equivalent of 5,515,123 bags. This net long position has most likely been marginally decreased, following the period of firmer trade that has since followed.   

The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market cut their net short position within the market by 23.66% over the week of trade leading up to Tuesday 16th. February: to register a new net short sold position of 9,035 Lots which is the equivalent of 1,505,833 bags.  This net short sold position has most likely been further decreased, following the period of sideways, marginally softer trade that has since followed. 

The May to May contract arbitrage between the London and New York markets widened yesterday: to register this at 70.72 usc/Lb. This equates to 52.40% 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 5,767 bags yesterday, to register these stocks at 1,739,391 bags, with 94.6% of these certified stocks being held in Europe at a total of 1,644,553 bags and the remaining 5.4% being held in the USA at a total 94,838 bags.  There was meanwhile a larger in number 7,764 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 78,954 bags.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive track for the day. The roll out of vaccines in many countries would seem to have provided a boost in speculative confidence with the commodities sector gaining some ground The Sugar, Cocoa and Coffee markets ended the day on a positive note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.63% higher; to see this index registered 506.51.  The day starts with the U.S. Dollar, trading at 1.408 Sterling, at 1.217 the Euro and with the US Dollar buying 5.466 Real.

The New York and London markets started the day yesterday trading close to par on a modest firmer note, both markets continued to oscillate around par for the remainder of the morning session. As the afternoon progressed both the London and the New York markets started to attract a large degree of buying support, this saw the markets trend firmer. Both markets continued on this firmer path accentuating the gains for the afternoon session, this saw both the New York and London markets settle near to the highs of the day.

The London market ended the day on a very firm positive note with 83.93% of the earlier gains of the day intact, while the New York market ended the day on a likewise firm positive note with 81.70% of the earlier gains of the day intact. This very firm close, with both markets retaining the earlier in the day gains, might inspire some degree of confidence as well as indicate direction and one might think the markets are due for a follow through steady start for early trade today, against the prices set yesterday, as follows:  

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

MAR    1391 + 48                                   MAR    133.45 + 5.95

MAY     1416 + 47                                   MAY     134.95 + 5.80

JUL      1431 + 48                                   JUL     136.70 + 5.70

SEP     1445 + 48                                   SEP     138.30 + 5.50

NOV     1460 + 48                                   DEC     140.00 + 5.30

JAN     1474 + 49                                   MAR    141.20 + 5.05

MAR    1490 + 48                                    MAY    141.70 + 4.95

MAY     1506 + 47                                   JUL        142.10 + 4.90