May 19, 2024

Wkly Coffee Market Recap and Comittment of Traders Numbers to 17 May 24

By Oliver Broster

New York

A positive week in NY as the market closed up 5.45 c/lb (+2.71%).  The open interest continues to decline -4,981 lots (-2.22%) continuing to indicate that participants are exiting the market.  Volume was down on the previous week -56,969 lots (-23%), mostly made up by reductions in the spreads and the outright volume.

London

A positive week in London with the market up $78 / MT (+2.27%).  Open interest increased + 4,374 lots (5.56%) indicating that participants are entering the market on the back of this move.  Volume was also down in comparison with the previous week -7,289 lots (-8.77%), however the percentage decline was much lower than in NY.

Coffee Markets Commitment of Traders

New York

The Manage Money (MM) continued to reduce their net long position this week -6,755 lots making their net long position 54,069 lots.  This is still elevated and towards the upper end of normal levels, but far below the 72,818 net long position on the 16 April ’24 when the market was trading at 228.40 c/lb.   Since that time the MM have sold -18,749 lots and the market has moved -27.55 c/lb. 

The Producer Merchants (PM) continued to reduce their net short position, buying + 5,693 lots making their net short position -47,992 lots.  This was achieved via the increases in long by + 618 lots and the reduction in shorts by – 5,345 lots.

In comparison with the same time last year the PM Long is very much in line whilst the PM short is well below.  The implication being that the physical hedged purchases held by the PM are very much reduced i.e. Producers have not responded to the move lower.

Since the cut off for the reporting of the COT data the Open Interest through to Thursday has declined by another -3,418 lots, implication being that MM continues to exit probably.

London

The MM in London continued to reduce their net long position -2,049 lots and their net long is now +21,800 lots.  The size of this position is now well within normal parameters and therefore is neutral, as they have plenty of room to either add or reduce this position. 

The PM also continued to reduce their net short position +2,193 lots (+ 6,843 lots long and +4,650 lots short) making their net position -24,862 lots short

Again, as per NY the PM Long is in line with where it was last year whereas the PM Short is well behind, considering the situation in the physical market and the movement in the PM Long this is surprising.

In spite of the reduction of the MM Long position the OI has increased up and until the COT reporting cut off date and since then through to Thursday.

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  • Weekly Coffee Market Recap and Commitment of Traders Numbers (Wk ending 07/06)

    New York

    Another strong week in New York (the fifth positive week in a row) the market closed + 3.65 c/lb. (+1.65%).  A big day on Fridays as the market moved from 232.50 c/lb to 224.70 c/lb ( -7.80 c/lb.) this was on much higher volume than during the rest of the week.  Open Interest (OI) through to Friday increased + 13,605 lots (+5.53%), it will be interesting to observe the OI numbers for Friday which will be released early in the afternoon (UK time) on Monday.

    The volume increased by 62% in comparison with the previous week.  The major change being the increase in the spread activity during the week.  At the same time the OI in the first position fell from 88,373 lots (31/05) to 78,456 lots (06/06) a decline of 9,917 lots.  This within the context of an increase in the overall OI of 13,605 lots.

    London

    The move in London was stronger than in NY and the market closed up + $ 141 /MT (3.54%).  This was the fourth consecutive week of gains in London.  Open interest was up through to Thursday +4,053 lots confirming increasing participation in the move, and whilst there was a significant sell off on Friday from an open of $4,280 / MT to a close of $4,125 / MT down - $ 155/ MT, the volume was not elevated. 

    Volume was up 20% on the previous week and again the major contributor to this was the spread volume which increased +36.34% in comparison with the previous week. 

    Coffee Comitment of Traders

    New York

    The Managed Money (MM) increased their long position during the week by +6,207 lots (+4,635 lots long and – 1,572 lots short) making them net long +63,220 lots long.  8 MM traders joined on the long side and 2 MM traders joined on the short side.  Earlier this year we reached a high of net long +72,818 lots on the 16/04, the current reporting number is the 5th highest / ranked since Jan ’22, all higher occurrences occurred in Apr’24.  The implication being that the probability of MM further increasing their long (whilst not implausible) is declining. 

    At the same time the Producer Merchants increased their net short by -4,229 lots (+5,310 lots long and + 9,539 lots short) making the PM Net short -59,702 lots. 

    In comparison with the same period last year:-

    London

    The MM increased their net long position by +3,029 lots (+2,811 lots long and -218 lots short, making them net long +28,625 lots long. 

    The PM increased their net short position selling -2,299 lots (-2,266 lots long and + 33 lots short) making their net position -32,735 lots short.

    In comparison with same period last year:-

    Unlike in New York both the PM Long and short remain behind where they were at the same time last year and the PM Short (hedges of purchases from origin) remains significantly behind.

     

     

     

     

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