Coffee Market Report

by | 12 Oct 2020

The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative decrease their net long position by 20.86% within the market over the week of trade leading up to Tuesday 6th. October: to register a new net long position of 20,298 Lots which is the equivalent of 5,754,393 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 latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative Managed Money Sector of this market decrease their net long position by 77.47% within the market over the week of trade leading up to Tuesday 6th. October; to register a new long position of 3,053 Lots.  This net long position is the equivalent of 508,833 bags and has most likely been drastically decreased following the period of mixed but overall softer trade that has since followed.

The two largest arabica coffee producers, Brazil and Colombia, individually observe national holidays today in Brazil, the Nossa Senhora de Aparecida and in Colombia, the Dia De La Raza ‘Day of the races’, which will likely see physical coffee trade muted in both countries for the day. 

The November to December contract arbitrage between the London and New York markets broadened on Friday; to register this at 54.40 usc/Lb.  This equates to 48.94% price discount for the London Robusta coffee market.     

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged on Friday to register these stocks at 1,098,459 bags, with 93.60% of these certified stocks being held in Europe at a total of 1,028,061 bags and the remaining 6.40% being held in the USA at a total 70,398 bags.  There were meanwhile 5,760 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,019 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 and Coffee markets ended the day on a positive note, while the Cocoa market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.0054% higher; to see this index registered at 421.3979.   The day starts with the U.S. Dollar steady, trading at 1.305 Sterling, at 1.182 the Euro and with the US Dollar buying 5.532 Brazilian Real.

Both the New York and London markets started the day on Friday trading on a positive note in quiet early morning trade, both markets encountered a degree of volatility into the mid-morning session, to see the markets oscillate between a mildly positive track which met with selling pressure, to break through par and track south around midsession.  As the afternoon progressed both the New York and London started to gain momentum and track a more positive trend, both markets continued on this path to see the markets settle on a positive note for the day.

The London market ended the day with on a positive note with 75% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 59.09% of the earlier gains of the day intact. This positive close might inspire some degree of confidence to possibly set the markets for a steady start to early trade today, against the prices set on Friday, as follows:  

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

NOV   1260 + 9                                                                        DEC    111.55 + 1.30 

JAN    1280 + 9                                                                       MAR   113.80 + 1.25 

MAR   1295 + 9                                                                       MAY   115.20 + 1.15

MAY   1310 + 7                                                                       JUL     116.60 + 1.05

JUL     1327 + 7                                                                      SEP     117.80 + 0.90 

SEP    1345 + 6                                                                      DEC    119.35 + 0.80

NOV   1363 + 6                                                                       MAR   120.85 + 0.70

JAN    1378 + 5                                                                        MAY   121.95 + 0.60