May 12, 2024

Weekly Coffee Market Recap and COT Numbers to 10 May 24

By Oliver Broster

New York

Over the course of the week not a dramatic change, up 0.40 c/lb (+0.20 %).  Volume was down in comparison with the previous weeks and the outright volume was down significantly.  Open interest decreased by -4,781 lots (-2.08%) indicating market participants were leaving the market. 

London

A short week this week in London with the bank holiday, the market ended the week down $ -101 / MT (-2.85%).  Increased volume on the Tuesday when the market had the biggest move.  Volume was elevated in comparison with the previous week especially for the outright volume.  The open interest hardly changed which is neutral indicating that there were no significant numbers joining or leaving the market. 

Coffee Commitment of Traders

New York

The Managed Money (MM)reduced their net long position by -8,824 lots, their net position now stands at +60,824 lots.  This is a long way off their recent highs and whilst it is still elevated the numbers are withing more normal parameters.  -13 MM traders left the long side of the market and +10 MM traders joined on the short side.

At the same time the Producer Merchants also reduced their net short, +7,362 lots making their net position -53,955 lots. 

London

The Managed Money in London reduced their position significantly, reducing their net long position by -7,156 lots making their net long position +23,849 lots.  This number is well within what we can expect from the MM / what we have seen over the last three years.  It is worth considering that the significant reduction in the long was achieved in a shortened week. -11 MM traders left the long side and +2 traders joined on the short side.

At the same time the Producer Merchants reduced their net short position + 14,332 lots making their net position -27,055.  This is a small position in comparison with long term averages.  It should be noted that the PM long increased by +4733 lots whilst at the same time the short was reduced by – 9,599 lots. 

 

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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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