21st. July, 2015. 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 18.12% over the week of trade leading up to Tuesday 14th. July; to register a net short sold position of 17,191 Lots on the day. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.37%, to register a net long position of 27,896 Lots on the day. Meanwhile the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 11.87% over the same week; to register a net short sold position of 23,343 Lots. This net short sold position which is the equivalent of 6,617,637 bags has most likely been increased again, over the period of mixed but overall marginally 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 sector of this market decrease their net long position within the market by 21.46% over the week of trade leading up to Tuesday 14th. July; to register a net long of 16,136 Lots on the day. This net long that is the equivalent of 2,689,333 bags has most likely been further reduced, over the period of mixed but overall negative trade that has since followed. The European Coffee Federation have announced that the continents port warehouse stocks increased by 483,183 bags or 4.16% during the month of May, to register these stocks at 12,105,250 bags at the end of the month. This figure is of course related to the registered warehouses in Antwerp, Bremen, Hamburg, Genova, Le Havre and Trieste and do not include the bulk container transit cofees, on-site roaster inventory stocks and the stocks held within the many private warehouses throughout west and east Europe, which support the European coffee roasting industry. One might guess in this respect that with the combination of east and west Europe accounting for approximately 1 million bags per week of green coffee demand, that the unreported stocks would be at least 2 million bags and therefore, the overall European coffee stocks at the end of May would have been approximately 14 million bags. This in terms of demand would indicate that the European coffee industry were sitting on the equivalent of approximately 14 weeks of coffee roasting stocks at the end of the May, which can be seen to be a very secure situation. While being a number that confirms the reasons for the prevailing lacklustre physical coffee demand that is further assisting to dampen spirits with the coffee terminal markets, which presently lack any supportive fundamental news. The recent experiences of higher than normal incidences of rainfall for south eastern Brazil during the traditionally dry winter months are now over, with forecasts for only the odd light shower to be experienced in the coming week. This is good news for the countries arabica coffee harvest that is presently in progress and is heading into the peak harvest, with the prospects for this to tail off during the coming month and ahead of the late September start of the new spring and summer rain season. The arbitrage between the markets narrowed yesterday to register this at 51.34 usc/Lb., while this equates to a 40.28% price discount for the London robusta coffee market. This arbitrage remaining relatively to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 500 bags on yesterday; to register these stocks at 2,139,772 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,880 bags. The commodity markets remained under pressure yesterday in generally thin holiday season trade and with the firm U.S. dollar having its influence within most markets, to see the overall macro commodity index maintain its recent soft stance. The Cocoa and London robusta Coffee markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.34% lower: to see this Index registered at 411.62. The day starts with the U.S. Dollar showing early buoyancy and trading at 1.556 to Sterling and 1.081 to the Euro, while North Sea Oil is steady in early trade and is selling at 56.00 per barrel. The London and New York markets started the day yesterday on a somewhat predictable softer note, following the overall lacklustre and soft close on Friday last week and both markets continued on this track into the early afternoon trade, when there was a relatively sudden change in fortunes and with both markets bouncing of the lows and moving swiftly back into positive territory. The recovery for the New York market was however short lived and the market soon dropped back into negative territory, while he London market retained its buoyancy. This remained the track for the rest of the day’s trade, with the New York market taking a sideways track at its lower levels of trade, while the London market struggled to maintain its modest positive stance. The London market continued to end the day with on the positive side of par but having shed 94.5% of the earlier gains of the day by the close, while the New York market ended the day on a soft note and with 54.3% of the earlier losses of the day intact. This close and with nothing in the way of bullish fundamental news available to the markets is likely to inspire little better than a steady to soft start for the markets for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1813 + 17 JUL 125.85 – 1.15 |
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