Coffee Bears Double Bets on Lower Robusta Price on Vietnam Crop
Money managers more than doubled bearish bets on robusta coffee traded in London as Vietnam, the world’s leading producer of the variety used in instant drinks and espresso, is set for a record crop, NYSE Liffe data showed.
Investors held a net-short position, or a bet on falling prices, of 6,216 futures and options in the week ended Sept. 17, the Commitments of Traders report on the bourse’s website today showed. That compares with 2,619 contracts a week earlier and is the biggest bet on lower prices since July 9, according to exchange data compiled by Bloomberg. Robusta coffee futures fell 2.8 percent in the seven days to Sept. 17.
Vietnam’s robusta crop probably will rise 17 percent to a record 1.7 million metric tons in the 2013-14 season starting Oct. 1, the median of nine estimates from local traders and shippers compiled by Bloomberg last month showed. That implies a harvest of 28.3 million bags, each weighing 60 kilograms (132 pounds). Volcafe, a unit of commodities trader ED&F Man Holdings Ltd., on Aug. 30 predicted a 30 million-bag crop.
“Robusta remains weak with the proximity of the big Vietnamese harvest as well as rising production in Africa,” Rodrigo Costa, a trading director at Caturra Coffee Corp. a dealer in Elmsford, New York, wrote in a report e-mailed today for Sao Paulo-based Archer Consulting, where he is a contributor. Robusta, trading at $1,676 a ton, is technically targeting support at $1,600 a ton, he said.
Buyers of coffee from the new crop in Vietnam want to get a discount to futures prices, Volcafe said in a Sept. 20 report. There is “constant demand” for beans for shipment in November and December, the trader said. While the first red cherries in Vietnam have already been picked by farmers, the majority of the new crop “will only come from December,” Amsterdam-based trader Nedcoffee BV said in a Sept. 17 report.
In cocoa, money managers cut bullish bets from a record in the period, the data showed. Investors held a net-long position, or a bet on higher prices, of 60,460 futures and options from a high of 61,644 contracts a week earlier. NYSE Liffe started publishing trader holdings in 2011. The beans for December delivery rose 1 percent in the period.
In white, or refined, sugar, money managers more than doubled their net-long position. Investors were betting on higher prices by 9,422 futures and options as of Sept. 17, up from 4,566 contracts a week earlier, exchange data showed. The sweetener slid 2.2 percent in the period.
In feed wheat, money managers decreased their net-short position to 485 contracts from 580 lots a week earlier. The grain retreated 2.1 percent in the period.
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