Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Coffee Market Report
October 03 2017
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 short sold position within the market by 20.21% over the week of trade leading up to Tuesday 26th. September; to register a new net short sold position of 13,151 Lots. Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.81%, to register a net long position of 34,730 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 7.27%, to register a net short sold position of 17,872 Lots. This net short sold position which is the equivalent of 5,066,633 bags has most likely been increased again, following a period of negative trade that has since followed and likewise, that of the Managed Money fund sector of the market.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net short sold position within this market by 96.96% during the week of trade leading up to Tuesday 26th. September; to register a net short sold position of 57 Lots. This net short sold position which is the equivalent of 9,500 bags has most likely been little changed, following the period of mixed but mostly sideways trade, which has since followed.
The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of September were 9,479 bags or 19.08% lower than the same month last year, at a total of 40,200 bags. This more modest number has contributed to the country’s exports for the just completed October 2016 to September 2017 coffee year to have been approximately 132,500 bags or 10.5% lower than the previous coffee year, at a total of 1,112,381 bags.
With the new crop harvest within the lower grown districts in Costa Rica having started and based on evidence of cherry counts nationally, the countries National Coffee Institute have forecasted that this new crop shall be approximately 188,000 bags or 13.6% higher than the last crop, at approximately 1.57 million bags.
The National Coffee Institute in Honduras have reported that the country’s coffee exports for the just completed October 2016 to September 2017 coffee year were approximately 1.92 million bags or 37.3% higher than the shipments in the previous coffee year, at a total of 7.2 million bags.
The National Coffee Institute in Honduras had in the meantime and following the much-improved record performance for this just completed 2016/2017 coffee year, forecasted a larger new crop and the possibility that coffee exports could increase by as much as 7% and to increase to 7.7 million bags for the new October 2017 to September 2018 coffee year.
The Trade Ministry in Brazil have reported that the countries coffee exports for the month of September 578,268 bags or 20.99% lower than the same month last year, at a total of 2,177,170 bags. This is perhaps a surprisingly large dip in exports ahead of the higher volume winter roasting season within the main northern hemisphere consumer markets, but is perhaps more a reflection of internal market price resistance for new crop coffees than being related to the smaller new arabica coffee crop this year.
The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.52 usc/Lb., while this equates to 29.5% 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 3,715 bags yesterday; to register these stocks at 1,809,401 bags. There was meanwhile a larger in number 8,576 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 88,559 bags.
The commodity markets had a mixed but generally softer day yesterday, with the overall macro commodity index taking a softer track for the day. The Sugar, Cocoa, London robusta Coffee and Orange Juice markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1% higher, to see this Index registered at 406.60. The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.324 to Sterling and at 1.170 to the Euro, while North Sea Oil is near to steady and is selling at US$ 56.00 per barrel.
The London market started the day close to par yesterday, while the New York market started the day on a softer note and with the markets entering the early afternoon trade with London on par and the New York market taking a softer track. As the afternoon progressed the New York market came under further pressure and with sell stops coming into play, to extend the losses and with the London market dipping back into modest negative territory. The London market did however soon attract support at the lows and to take a steady upside track into positive territory, while the New York market bounced back from the lows and headed back towards par, but to dip back into modest negative territory for late trade.
The London market ended the day on a very positive note and with 94.3% of the earlier gains of the day intact, while the New York market ended the day on a soft note, but having recovered 69% of the earlier losses of the day by the close. This close and with the relatively robust nature of the London market as against a weak picture for the New York market contributes towards some degree of uncertainty, but one might expect that there shall be some degree of hesitancy and a near to steady start for early trade today against the prices set yesterday.