The latest Commitment of Traders report from the New York arabica market has seen the Non-Commercial Speculative sector decrease their net long position by 4.06% within the market over the week of trade leading to Tuesday 6th. August 2024: to register a new long position of 39,881 lots, which is the equivalent of 11,306,086 bags. This net long position has most likely been little changed following the period of mixed trade that has since followed.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money Sector decrease their net long position by 20.26% within the market over the week of trade leading to Tuesday 6th. August 2024: to register a new net long position of 26,096 Lots which is the equivalent of 4,349,333 bags. This net long position has most likely been little changed following the period of mixed trade that has since followed.
Safras & Mercado have also estimated that almost 92% of the new Brazil coffee crop has already been harvested, as of the 6th August 2024. The harvest this year is at a faster pace, when compared to the same time last year which was reported at around 86%. Based on their forecast for a new crop of 66.04 million bags, the report would indicate that so far approximately 60.76 million bags of the new crop coffee have been harvested, the coffee made up of around 20.50 million bags of Conilon robusta coffee, which is reported at 99% of the harvest complete and approximately 40.26 million bags of arabica coffee harvested, which is reported at 88% complete thus far.
The Southeast coffee regions have experienced a wet cold front over the weekend, bringing with it cooler temperatures and scattered rainfall. The main areas to experience this weather system are, São Paulo, South of Minas, and Zona da Mata. Temperatures have been reported in the low single digits in degrees Celsius, temperatures to start the week are unlikely to drop below zero. The last winter month full moon on 19th August. Overall, reports are that this winter has been mild thus far. Weather conditions are forecast to improve and warm up in the days to come.
The Certified washed arabica coffee stocks held against the New York arabica market were seen to decrease by 195 bags on Friday, to register these stocks at 828,509 bags, with 98.11% of these certified stocks held in, Europe at a total of 812,866 bags and the remaining 1.89% being held in the USA at a total 15,643 Bags. Of this, a total 417,931 bags, or 50.44% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.72% of these certified coffees, from Honduras. The pending grading stocks were seen to increase by 2,240 bags on the day; to register 49,883 bags pending grading on the day.
The September 2024 to September 2024 contract arbitrage between the London and New York markets narrowed on Friday, to register this at 37.83 Usc/Lb. This equates to 16.16% price discount for the London robusta coffee.
It was a softer day on the commodity markets on Friday, with the US Dollar gaining ground against a basket of other currencies, a firmer Dollar is seen to be a bearish factor for commodities traded in other currencies. Monthly key inflation data from leading US market is due to be released this week. The Cocoa, Wheat and Gold markets ended the day on a firm note, while the Coffee, Corn, Soybean, Sugar, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.276 Sterling, at 1.092 the Euro and with the US Dollar buying 5.506 Brazil Real.
The New York market started the day on Friday trading on a softer note, carrying through the pressure from the close on Thursday, whilst the London market started the day on Friday trading to the north of par, gaining support early to trend firmer. The markets were seen to encounter resistance early to drop back from the early highs, pressured by selling in the markets. As the afternoon progressed the volume increased, to contribute to the day’s direction with speculative selling pressuring the New York market lower as stops were triggered along the way, with first notice day in the prompt month in New York approaching in just over a weeks’ time, open interest is reported at 65,464 lots, which may add to additional volatility in the days to come. The London market followed suit and the markets continued to project lower with a measure of speculative long liquidation to accentuate the losses for the day’s trade. The late afternoon session saw the markets rebound slightly off the lows of the day to recover a small degree of losses, to see the markets settle on a softer note at the close.
The London market ended the day on a negative note with 92.43% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 86.21% of the earlier losses of the day intact. This softer close for both New York and London markets, with the markets pressured lowered throughout the session to settle near to the lows of the day, might see the markets set for a hesitant start to early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
SEP 4326 – 110 SEP 234.05 – 11.25
NOV 4162 – 91 DEC 230.25 – 9.10
JAN 4019 – 95 MAR 226.80 – 8.50
MAR 3888 – 91 MAY 224.65 – 7.75
MAY 3792 – 89 JUL 222.30 – 7.25
JUL 3710 – 88 SEP 219.90 – 6.75
SEP 3645 – 81 DEC 217.20 – 6.35
NOV 3587 – 79 MAR 214.60 – 6.00
