Coffee Market Report

by | 18 Feb 2021

The Vietnamese have returned from their week-long Tet New Year celebrations over the last week, which brought in the year of the Buffalo on Friday 12th February.  The shortened week may see a degree of catch-up price fixation selling activity, to bring some more activity to the London market in the coming days. 

The weather in Brazil remains conducive at this time, as the new July 2021 to June 2022 crop that is forecast by a collection of independent surveys to potentially reach 21.20 million bags conilon robusta and 34.51 million bags arabica coffees, continues to develop toward harvest that would traditionally start around April in the Conilon robusta areas, with arabica regions to follow a couple of months later. 

The March 2021 to March 2021 contract arbitrage between the London and New York markets widened yesterday: to register this at 64.51 usc/Lb. This equates to 51.32% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 14,830 bags yesterday, to register these stocks at 1,739,310 bags, with 94.6% of these certified stocks being held in Europe at a total of 1,644,472 bags and the remaining 5.4% being held in the USA at a total 94,838 bags.  There was meanwhile a smaller in number 9,000 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 76,094 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 5,000 bags over the weeks of trade leading up to Monday 15th. February, to see these stocks registered at 2,384,500 bags, on the day

It was a neutral day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar and Coffee markets ended the day on a positive note, while the Cocoa market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.19% lower; to see this index registered 495.17.  The day starts with the U.S. Dollar trending firmer but steady, trading at 1.385 Sterling, at 1.204 the Euro and with the US Dollar buying 5.411 Real.

The New York and London market started the day yesterday trading close to par on a modest firmer note, both markets continued to trade around par for the remainder of the morning session. As the afternoon progressed the New York market attracted a degree of pressure and dropped back from the morning highs, this saw the market hit a floor, bringing speculative buying support in to see ths market register a late in the day recovery, to settle on a firmer note near to the highs of the day. The London market attracted a degree of buying support early in the afternoon session, this saw the market set on a firmer path for the afternoon trade. The London market hit a ceiling, limiting the gains for the afternoon session to see the London market settle on a modest firmer note for the day.

The London market ended the day on a modest positive note with 78.57% of the earlier gains of the day intact, while the New York market ended the day on a firm positive note with 87.10% of the earlier gains of the day intact. This firmer close, with both the New York and London markets settling near to the highs of the day, might inspire some degree of confidence to possibly set the markets for a follow through steady start for early trade today, against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT              NEW YORK ARABICA USc/Lb.                                                            

MAR    1349 + 11                                   MAR    125.70 + 1.35

MAY     1372 + 9                                     MAY     127.70 + 1.20

JUL      1387 + 11                                   JUL     129.25 + 1.15

SEP     1401 + 10                                   SEP     131.05 + 1.20

NOV     1417 + 10                                   DEC     133.05 + 1.15

JAN     1430 + 9                                     MAR    134.65 + 1.10

MAR    1447 + 9                                     MAY    135.35 + 1.05

MAY     1464 + 9                                     JUL        135.85 + 1.00