Coffee Market Report

by | 30 Mar 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 30.21% over the week of trade leading up to Tuesday 23rd. March; to register a new net long position of 19,239 lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.42%, to register a net long position of 72,868 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 23.52% to register a new net long position of 21,587 Lots, which is the equivalent of 6,119,819 bags. This net long position has most likely been further decreased, following the period of mixed but overall softer trade that has since followed.

The May-to-May contract arbitrage between the London and New York markets narrowed yesterday: to register this at 64.64 usc/Lb. This equates to 50.87% 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 333 bags yesterday, to register these stocks at 1,834,930 bags, with 94.9% of these certified stocks being held in Europe at a total of 1,741,467 bags and the remaining 5.1% being held in the USA at a total 93,463 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,431 bags.

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a negative track for the day.  The terminal markets settled lower yesterday, with the news of the reopening of the Suez Canal easing pressure on global supply chain concerns. The Sugar, Cocoa, Coffee, Gold, Palladium, Platinum and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar, trading at 1.377 Sterling, at 1.176 the Euro and with the US Dollar buying 5.782 Real.   

The New York market started the day yesterday trading on a modest firmer note, while the London market started the day yesterday trading on a modest softer note for the day. Both market quickly were set on a softer track for the remainder of the morning session.  As the afternoon progressed the New York and London markets rallied to gain momentum before hitting a ceiling limiting the gains for the early afternoon session.  Selling activity has been assisted to a degree by the weaker overall Brazil Real currency in relation to the US Dollar, which fell to a 2-week low yesterday, boosting returns in local Brazil Real terms.  Both the New York and London markets slipped back toward the end of the session, to settle on a softer note for the day.

The London market ended the day on a negative note with 85.19% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 63.04% of the earlier losses of the day intact. This softer close, with both markets dropping back late in the day, does little to indicate direction and one might think the markets are due for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

MAY     1376 – 23                                   MAY     127.05 – 1.45

JUL      1397 – 19                                   JUL     129.05 – 1.45

SEP     1415 – 19                                   SEP     131.00 – 1.45

NOV     1431 – 19                                   DEC     133.35 – 1.45

JAN     1446 – 18                                   MAR    135.30 – 1.40

MAR    1461 – 19                                    MAY    136.25 – 1.35

MAY     1478 – 19                                    JUL        136.70 – 1.40

JUL      1494 – 20                                    SEP     136.90 – 1.45