Coffee Market Report

by | 20 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 8.39% within this market over the week of trade leading up to Tuesday 13th. October; to register a new net long position of 26,963 lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.39%, to register a net long position of 56,064 Lots on the day.

Over the same week, the Non-Commercial Speculative sector of this market increase their net long position within the market by 0.02% to register a new net long position of 20,303 Lots which is the equivalent of 5,755,811 bags. This net long position has most likely been very marginally increased, 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 switch their net long position to a net short sold position within the market over the week of trade leading up to Tuesday 13th. October; to register a new short position of 6,600 Lots.  This net long position is the equivalent of 1,100,000 bags and has most likely been switched following the period of mixed but overall softer trade that has since followed.  

The January 2021 to December 2020 contract arbitrage between the London and New York markets narrowed yesterday; to register this at 46.86 usc/Lb.  This equates to 44.19% price discount for the London Robusta coffee market.     

The Certified washed Arabica coffee stocks held against the New York exchange was seen to remain unchanged on the day,  to register these stocks at 1,119,923 bags, with 93.70% of these certified stocks being held in Europe at a total of 1,049,613 bags and the remaining 6.30% being held in the USA at a total 70,310 bags.  There was meanwhile a larger in number 12,184 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,638 bags.  

It was a modest firm day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar, Cocoa, London Robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas and New York Arabica Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1520% higher; to see this index registered at 419.0495.   The day starts with the U.S. Dollar steady, trading at 1.294 Sterling, at 1.178 the Euro and with the US Dollar buying 5.606 Brazilian Real.

The London and New York markets started the day yesterday trading on a modest soft note, both markets continued to trade around par for most of the morning session. As the afternoon progressed the London market trended marginally positive, while the New York market under relatively thin trade volumes continued on a softer path to see the market settle on a negative note for the day. The London market settled on a positive note for the day.

The London market ended the day with on a modest positive note with 53.33% of the earlier gains of the day intact, while the New York market ended the day on a negative note with 72.73% of the earlier losses of the day intact. This mixed close does little to indicate direction 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   1280 + 7                                                                DEC   106.05 – 1.20 

JAN    1305 + 8                                                               MAR   108.95 – 1.05

MAR   1311 + 5                                                                MAY  110.50 – 0.90

MAY   1325 + 5                                                                 JUL     111.85 – 0.85

JUL     1342 + 5                                                                SEP    113.05 – 0.80 

SEP    1359 + 4                                                                DEC   114.80 – 0.65

NOV   1376 + 3                                                                MAR   116.45 – 0.55

JAN    1392 + 3                                                                 MAY   117.50 – 0.55