I suspect you are talking about coolant used in machining that happens to run through the spindle, vs "water", and has fine metal particles in it.
Anyway, if you implement some of the cowboy ideas here, let us know which CNC's will have it so we can steer clear of being electrocuted by them http://www.ti.com/lit/gpn/lm35
"As with any IC, the LM35 and accompanying wiring and circuits must be kept insulated and dry, to avoid leakage and corrosion."
" the LM35 can be mounted inside a sealed-end metal tube, and can then be dipped into a bath or screwed into a threaded hole in a tank"
Use an automotive sensor and you're done.