Coffee Market Report

by | 06 Sep 2021

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector raise their net long position by 10.36% within the market over the week of trade leading up to Tuesday 31st. August:  to register a net long position of 33,820 lots, which is the equivalent of 9,587,820 bags. This net long position has most likely been little changed following the period of marginal 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 raise their net long position by 19.59% within the market over the week of trade leading up to Tuesday 31st. August: to register a new net long position of 24,634 Lots which is the equivalent of 4,105,667 bags.  This net long position has most likely been marginally increased following the period of firmer trade that has since followed. 

Today is Labour day in the USA, which shall see the New York market closed for the day. Thus, one can expect little excitement for the London market trading solo for the day. 

The November-to-December contract arbitrage between the London and New York markets narrowed on Friday to register this at 99.61 usc/Lb. This equates to 51.61% price discount for the London Robusta coffee market.  This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,455 bags on Friday, to register these stocks at 2,162,806 bags, with 94.21% of these certified stocks being held in Europe at a total of 2,037,672 bags and the remaining 5.79% being held in the USA at a total 125,134 bags.  Of this, a total 1,151,885 bags, or 53.26% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.22% of these certified coffees, originating from Honduras.  There was meanwhile no change to the number of bags pending grading to the exchange; to register these pending grading stocks at 4,078 bags. 

It was a firmer day on the commodity markets on Friday, as slower than expected US jobs growth data in August saw the US Dollar drop lower, creating doubt as to when the Federal Reserve might taper monetary policy.   The Cocoa, London Robusta Coffee, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the Sugar, New York Arabica Coffee and Corn markets ended the day on a softer note.  The day starts with the U.S. Dollar trading at 1.386 Sterling, at 1.189 the Euro and with the US Dollar buying 5.191 Brazil Real.   

The New York and London markets started the day on Friday trading on a modest softer note. The markets continued to oscillate around par before gaining momentum to trend firmer for the remainder of the morning session. As the afternoon progressed the markets continued to gain momentum before hitting a ceiling to limit the gains for the day, the market dropped back to set the tone for the remainder of the afternoon session. The markets rallied late in the day to recover most of the earlier in the day losses to see the New York market settle on a softer note, while the London market recovered to settle on a modest close to par positive close at the close. 

The London market ended the day on a modest close to par positive note and with 13.04% of the gains of the day intact, while the New York market ended the day on a negative note and with 45% of the losses of the day intact. This mixed but overall softer close, does little to indicate direction nor does it inspire confidence, one might think that the London Robusta market trading solo for the day is due for little better than a hesitant start to early trade today, against the prices set on Friday, as follows:    

LONDON ROBUSTA US$/MT                            NEW YORK USC/LB.                                                                                          

NOV     2059 + 3                                                  DEC     193.00 – 1.35

JAN      2025 + 4                                                 MAR     195.70 – 1.35

MAR    1977 + 6                                                 MAY     196.70 – 1.30

MAY     1962 + 7                                                   JUL      197.20 – 1.30

JUL      1957 + 7                                                  SEP     197.65 – 1.30

SEP      1956 + 8                                                  DEC     198.35 – 1.25

NOV     1958 + 8                                                  MAR    198.95 – 1.15

JAN     1968 + 8                                                  MAY     199.30 – 1.15