The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within the market by 9.65% during the week of trade leading up to Tuesday 15th. August; to register a net short sold position of 4,120 Lots on the day. This net short-sold position which is the equivalent of 1,168,002 bags has most likely increased again, with overall more negative trade, which has since followed.

Reports from Nicaragua have indicated that the countries cumulative exports for the first ten months of the present October 2016 to September 2017 coffee year were 297,734 bags or 17.67% higher than the same period in the previous coffee year, at a total of 1,982,500 bags. This much-improved number and with estimates that the country shall register exports of approximately 300,000 bags of coffee during August and September, indicates that the country is due to register exports of close to 2.3 million bags for the present coffee year.

The world’s largest coffee cooperative Cooxupé In Brazil and with the new crop harvest close to completion, have reduced their earlier estimates for their new arabica coffee crop and say that while they had initially estimated a 15% smaller new crop, they now estimate that their new crop is 30% below last year’s production, at only 14 million bags. This unforeseen dip they related to the combination of erratic rainfall earlier in the year and its negative effect upon the overall bean size of the new crop and to the unexpected rise in the levels of coffee borer beetle, which was experienced over the past few months.

Most of the main arabica coffee districts in Brazil experienced rains last week, but it remained largely dry over the leading conilon robusta coffee state of Espirito Santo. These rains are likely to result in some early flowerings and have bought with them in terms of the relatively early start to the new spring and summer rain season, speculation for a much larger new crop due for Brazil next year.

It is however early days and with this new rain season really only due to start late in the coming month, the initial excitement over a large new crop due for Brazil next year might well suffer if there are no further rains forthcoming in the coming weeks, as it would then bring to the fore the potential losses that would come with abortion of these early flowerings. Thus, one can expect that there shall be much focus upon the weather reports out of Brazil, over the next two to four weeks.

The November to December contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 36.40 usc/Lb., while this equates to 27.64% 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 9,657 bags on Friday; to register these stocks at 1,623,723 bags. There was meanwhile a smaller in number 260 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 87,086 bags.

The commodity markets had a mixed day but with many markets tending to attract support, to see the overall macro commodity index taking a positive track for the day. The Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Wheat, Corn and Soybean markets had a day of buoyancy, while the Natural Gas, New York arabica Coffee, Copper, Orange Juice, Gold and Silver markets having a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.17% higher, to see this Index registered at 396.95. The day starts with the U.S. Dollar steady and trading at 1.286 to Sterling and at 1.173 to the Euro, while North Sea Oil is tending softer and is selling at $ 48.40 per barrel.

The coffee markets started the day on Friday with a degree of buoyancy and to take a positive track into the early afternoon trade, but with the New York market once again coming under pressure and heading back into negative territory. The London market did however manage to buck the negative influences of the New York market and maintain a steady sideways track and to start to attract support, to add to the gains and with buy stops being triggered, to accentuate these gains and to take a positive track through to the close. The New York market meanwhile and with the combined influences of the positive nature of the overall macro commodity index, the positive nature of the London market and the lack of producer selling over the market, recovered most of the earlier losses to set the market for a more modest negative close to the day and the week.

The London market ended the day on a very positive note and with 94% of the earlier gains of the day intact, while the New York market ended the day on a modestly negative note and having recovered 79.4% of the earlier losses of the day by the close. This close and with the surprising rally experienced within the London market on Friday while the New York market did little more than to hang on for the day, does not provide much in the way of an indicator for the market and one might expect to see a degree of hesitant caution and perhaps only a near to steady start for the markets for early trade today against the prices set on Friday, as follows:

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

SEP 2116 + 54                                                 SEP 128.05 – 0.40
NOV 2101 + 47                                              DEC 131.70 – 0.35
JAN 2066 + 33                                              MAR 135.30 – 0.30
MAR 2052 + 29                                            MAY 137.65 – 0.25
MAY 2056 + 27                                              JUL 139.85 – 0.25
JUL 2074 + 27                                                SEP 142.00 – 0.25
SEP 2080 + 27                                               DEC 145.10 – 0.30
NOV 2092 + 27                                            MAR 148.15 – 0.30
JAN 2098 + 27                                              MAY 150.05 – 0.15
MAR 2103 + 27                                              JUL 151.75 – 0.10