Coffee Market Report

by | 13 Oct 2020

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 by 18.80% within this market over the week of trade leading up to Tuesday 6th. October; to register a new net long position of 29,432 lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.35%, to register a net long position of 57,441 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market decreased their net long position within the market by 20.86% 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 Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of September are down by 0.5% from the previous month, to total 1,662,250 bags. This number proving to be marginally below the 1.67 million bags that had been initially forecast for the month’s coffee exports.  The report also states that for the first nine months of 2020, Vietnam coffee exports are 1.4% lower than the same period last year at a total of 20,833,333 bags. 

The Vietnam Customs Authority have further reported that this has contributed to the country’s coffee exports for the October 2019 to September 2020 coffee year to be 3.73% lower than the previous coffee year at a total of 27,310,566 bags.  

The November to December contract arbitrage between the London and New York markets narrowed yesterday; to register this at 53.23 usc/Lb.  This equates to 48.77% 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 1,206 bags yesterday to register these stocks at 1,099,665 bags, with 93.60% of these certified stocks being held in Europe at a total of 1,029,022 bags and the remaining 6.40% being held in the USA at a total 70,643 bags.  There were meanwhile a 4,811 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,208 bags.  

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a soft sideways track for the day. The Sugar, Cocoa and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.7341% lower; to see this index registered at 418.3045.   The day starts with the U.S. Dollar steady, trading at 1.305 Sterling, at 1.180 the Euro and with the US Dollar buying 5.532 Brazilian Real.

The New York market started the day yesterday trading on a positive note, while the London market started the day yesterday trading a on a softer note. The New York market quickly gained traction to see the market trend positive for the morning session, while the London market continued on a softer path. As the afternoon progressed the New York market was seen to come under a degree of selling pressure and to see the market set on a softer track for the afternoon trade. Both the London and the New York markets continued on  a softer path to see both markets settle  near to the lows of the day.

The London market ended the day with on a negative note with 93.10% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 80% of the earlier losses of the day intact. This soft and lacklustre close does little to inspire confidence and one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:  

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

NOV   1233 – 27                                                                         DEC    109.15 – 2.40 

JAN    1255 – 25                                                                        MAR   111.50 – 2.30 

MAR   1271 – 24                                                                        MAY   112.95 – 2.25

MAY   1287 – 23                                                                        JUL     114.40 – 2.20

JUL     1303 – 24                                                                       SEP     115.65 – 2.15 

SEP    1321 – 24                                                                       DEC    117.30 – 2.05

NOV   1339 – 24                                                                        MAR   118.95 – 1.90

JAN    1354 – 24                                                                         MAY   120.05 – 1.90