Coffee Market Report February 10 2017

The Brazil Exporters Association CECAFÉ have reported that Brazil exports of green coffee for the month of December were 150,000 bags or 5.92% lower than the same month in the previous year, at a total of 2.38 million bags. The conilon robusta coffee exported during the month of January being 22,118 bags, or double that of the total of only 11,037 bags reported in the December 2016 green coffee exports.  There is no doubt meanwhile that the soluble export market has taken a toll due to the overall tighter availability of conilon robusta coffees and this sector of the market have reported exports of soluble value added coffees to have registered a year on year decline to be at 35% lower than that of the same month last year, to a total of 174,743 bags in green coffee equivalent.
The May to May contracts arbitrage between the London and New York markets widened yesterday, to register this at 49.76 usc/Lb., while this equates to 33.71% 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 decrease by 1,901 bags yesterday; to register these stocks at 1,311,406 bags.  The certified stocks reported an increase of 4,756 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 35,065 bags.
It was a mixed but overall positive day for the commodity markets, although uncertainty surrounds the upcoming French and German elections pushing the Euro lower, there was a semblance of improved economic data confidence in the U.S. and the US Dollar gained in value against other major currencies on the day.  The Oil, Cotton, Coffee, Orange Juice, Wheat and Palladium markets had a positive day, while it was a softer day in Sugar, Cocoa, Copper, Corn, Soybean, Gold, Silver and Platinum markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.203% higher, to see this Index registered at 431.76.  The day starts with the U.S. Dollar trading at 1.25 to Sterling and steady at 1.065 to the Euro, while North Sea Oil is steady and is selling at $ 54.19 per barrel.
 
The coffee markets took a more positive turn yesterday with the start in the session lower in London and a positive opening in New York. The London robusta market seemed to have satiated the speculative long liquidators for the time being and this market bubbled in roll over trade upward, to recover early losses and move into positive territory at midsession.  With the exception of an early in session technically driven gap back to the day’s opening levels in New York, this market gathered positive momentum through the session as roll over activity ahead of the approaching first notice day for the prompt month in New York, provided a degree of buoyancy and built up the positive position to the high of the day by midsession.  This market met with renewed selling at the top of the day and eased off but in a new higher and narrow range for the duration of the afternoon session to the close.  The markets set the close yesterday, on a positive note and near to the days’ highs in both markets and after a buoyant note, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2126 + 20                                              MAR   145.20 + 2.30
MAY     2157 + 21                                              MAY   147.60 + 2.30
JUL      2167 + 21                                              JUL     149.80 + 2.20
SEP      2173 + 20                                              SEP    152.00 + 2.15
NOV     2177 + 20                                               DEC   155.25 + 2.20
JAN      2181 + 22                                              MAR   158.25 + 2.20
MAR     2185 + 21                                              MAY   159.95 + 2.15
MAY     2185 + 21                                              JUL    161.50 + 2.10
JUL      2187 + 21                                              SEP    163.00 + 2.10
SEP      2187 + 21                                              DEC   165.20 + 2.15