Coffee Market Report February 02 2017


1st February, 2017.
West Africa’s leading robusta coffee producer, Ivory Coast have reported that the countries coffee exports for the month of December were 25.68% lower than that of the same month in the previous year and registered the months’ coffee exports at 72,933 bags.  The cumulative calendar year total for exports of mainly robusta coffees over the twelve month period from Ivory Coast, are reported at 18.28% or 191,717 bags higher than that of the same time in the previous year to December, to register exports at a total 1,243,483 bags in 2016.
The International Coffee Organisation have reported that global coffee exports for the month of December 2016 were 5.3% higher than the same month in the previous year, at a total of 10.17 million bags.  This has resulted in the cumulative global coffee exports for the first three months of the new October 2016 to September 2017 coffee year to be 8.3% higher than the same period in the previous coffee year, at a total of 29.77 million bags. The cumulative calendar year coffee exports for the twelve months ending December are further detailed that total arabica coffee exports registered an increase year on year of 3.63% to a total 73.26 million bags and similarly the total robusta coffee exports registered an increase year on year of 4.46%, to total 45.16 million bags in the twelve months to end December 2016.
 
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 50.58 usc/Lb., while this equates to 33.27% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,156 bags yesterday; to register these stocks at 1,297,522 bags.  The certified stocks reported a decrease of 4,821 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,245 bags.
The commodity markets had a mixed but overall positive day yesterday.  The US Dollar slipped lower and registered losses on the day against a basket of other major currencies. The latest round of US consumer confidence and manufacturing data would appear to have missed expectations, along with  a generally mixed market reception to the flow of alternate economic and political policies presently pouring through international media from the worlds’ largest economy.  The Oil markets registered an improvement on the day, so too was it a better day for Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Gold, Silver, Platinum and Palladium. It was a softer day for Orange Juice, Soybean and Coffee markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3443% higher, to see this Index registered at 429.26.  The day starts with the U.S. Dollar near to steady and trading at 1.255 to Sterling and 1.078 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.55 per barrel.
 
The London and New York markets started the day on a mildly softer note in both markets, with the slide in the US Dollar value assisting to boost the markets into positive territory during the early session, although briefly in New York and London, in a narrow range incrementally positive in limited morning volume of trade. As the day gained momentum and the American markets opened their day to lend an influence to direction, the news of conducive weather in the Brazil coffee areas weighed in on sentiment to see the latter half of the day move lower.  The trend in New York remained negative, with only limited underlying buyers present provide resistance and meet the volume of seller activity as the speculator sector of the market took precedence and cover, the New York market pressured lower by the latter half of the session.  The less active London market followed suit to see both markets in negative territory as the day drew to a close.  The low touched in New York appeared to attract fresh buying activity to the floor and both markets recovered a degree of the afternoon losses incurred toward the end of the day.  New York regained 1.97% from the low and London a recovery of 1.26% from the low on the day, to set the close in both markets yesterday, in negative territory but with a degree of late in the day buoyancy, as follows;
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
JAN      2252 Unch   
MAR     2222 – 15                                              MAR   149.55 – 1.60
MAY     2236 – 14                                              MAY   152.00 – 1.70
JUL      2244 – 13                                              JUL     154.35 – 1.70
SEP      2249 – 12                                              SEP    156.55 – 1.75
NOV     2249 – 14                                              DEC    159.60 – 1.80
JAN      2248 – 14                                              MAR   162.45 – 1.85
MAR     2247 – 13                                              MAY   164.15 – 1.80
MAY     2249 – 13                                              JUL    165.70 – 1.80
JUL      2259 – 13                                              SEP    167.15 – 1.75