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Coffee Market Report
December 27 2017

The U.S.A. based markets returned to work yesterday, following the Christmas long weekend, but with the London markets and most of the leading European based trade, remaining on holiday. Thus, with many of the international trade off the field of play for the day, one might not see much significance from the direction taken by the exchanges in operation for the day yesterday.

The global markets are due to return to work today and to trade for the rest of the week, ahead of the New Year holiday on Monday next week, which shall see the markets enjoy another long weekend. This holiday that follows this week’s short week shall most likely see many market players taking advantage of the situation and a few days off this week for a bridging holiday week, to possibly result in lacklustre trade from the physical sectors of the commodity markets. But one might expect to see with the year end to the fore, some active book squaring activity on the part of the funds coming into play for the commodity markets, over the next couple of days of trade.

The March 2018 to March 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 44.54 usc/Lb., while this equates to 36.45% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange registered no change yesterday; to register these stocks at 1,965,815 bags. There was meanwhile also no change to the number bags pending grading for this exchange; to register these pending grading stocks at 51,888 bags.

The commodity markets which were in operation yesterday tended to show some stability and with the overall macro commodity index from these markets, taking a positive track for the day. The Oil, Sugar, Cocoa, New York arabica Coffee, Copper, Gold and Silver markets all had a positive day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.89% higher; to register this index at 413.54. The day starts with the U.S. Dollar steady and trading at 1.338 to Sterling, at 1.187 to the Euro and 3.311 to the Brazilian Real, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 66.60 per barrel.

The London market was closed yesterday, to leave the New York market to trade solo for the day and with a late start, to provide for a shortened day’s trade. The New York market and against the evidence of the extensive speculative and funds net short sold position within this market as at Tuesday last week, attracted short covering support and started the day with immediate buoyancy, which was the track for the day and with the market continuing to recover all the losses posted on Friday last week.

The New York market ended the day on a very positive note and with 94.7% of the earlier gains of the day intact, which is likely to inspire a degree of confidence and perhaps some degree of buoyancy for both the London and New York markets for early trade today, against the prices set in London on Friday and New York yesterday.