Update coffee prices week 41 (October 5, 2020 – October 10, 2020)

Disagreement in the US Congress over the new funding package has led to erratic fluctuations in the USD, while dry weather forecast in major Arabica growing areas in Brazil and rumors about Vietnam’s upcoming Robusta coffee harvest promised to be good has caused the two world coffee futures markets to go differently.

For the whole week 41, London market had 2 gaining sessions and 3 decreasing sessions. Robusta coffee futures for immediate delivery in November decreased by 30 USD, or 2.33%, down to 1,260 USD / ton, futures for January delivery decreased by 31 USD, or by 2.36%, to 1,280 USD/ ton and term delivery in March reduced all 32 USD, ie down 2.41%, to 1,295 USD / ton, the decline is quite strong. Trading volume is above average.

Robusta London T11 / 2020 chart week 41 (October 5, 2020 - October 10, 2020)

Robusta London T11 / 2020 chart week 41 (October 5, 2020 – October 10, 2020)

In contrast, New York market had 4 gaining sessions and 1 decreasing session. Arabica coffee futures for immediate delivery in December increased all 2.6 cents, or 2.39%, to 111.55 cents / lb and futures for March delivery increased by 2.85 cents, or 2, 57%, to 113.8 cents / lb, gains are quite strong. Trading volume remained quite high above average.

The price of coffee beans in the Central Highlands market has decreased by 100-200 VND, down to fluctuate in the range of 30,800 – 31,300 VND / kg.

Prices of two-floor coffee futures moved in opposite directions, rose in New York and decreased significantly in London when there was much supportive basic information. Highlights are drought concerns in the main Arabica coffee regions of Brazil and rumors of an increase in Vietnam’s upcoming Robusta crop output, although the market confirms that Robusta demand is growing higher compared with Arabica.

Meanwhile, the recovery of US stocks strengthened the dollar’s strength in the currency basket and pulled the euro back to weakness, at the same time persistent intra-EU instability and the risk of a no-deal Brexit accompanied by a second outbreak of covid-19 that would push the European Union into an unforeseen economic recession.

The National Center for Weather Forecast of the US predicts an 85% chance that the La Nina weather phenomenon will appear later this year, will cause heavy rain for coffee producing countries around the Pacific Rim and drought for Southeastern Brazil and the coffee-producing countries of East Africa.

The latest Trader Commitment Report (CFTC) from New York’s Arabica coffee market shows that non-commercial speculators have reduced their net buying position by 20.09% in the trade week to Tuesday on September 29, down to register to buy net at 25,645 lots, equivalent to 7,270,244 bags.

The latest CFTC report from Robusta coffee market in London shows that the short-term speculation of Money Management Funds cut their net buying position by 18.75% this trade week to subscribe to net buy at 13,551 lots, equivalent to 2,258,500 bags.

As of Monday, October 5, inventories of Robusta coffee certified by the London floor and tracked allocation have decreased by 860 tons, or 0.79% from the previous trading week, to registration at 108,048 tons (equivalent to 1,808,000 bags, 60 kg bags).

Source: Anh Văn (giacaphe.com)

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