Coffee Market Report May 12 2017

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 44.26 usc/Lb., while this equates to 32.97% price discount for the London robusta coffee market.  This still relatively low arbitrage, remains not such an attractive factor for the many price sensitive roast and ground 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 7,049 bags yesterday; to register these stocks at 1,427,110 bags.    There were meanwhile 2,350 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,187 bags.

The commodity markets encountered a steadier to positive day yesterday, as the US Dollar registered a degree of stability.  It was a firmer day for the influential Oil markets, Cotton, Copper, Orange Juice, Wheat, God, Silver, Platinum and Palladium.  Although a softer day posted for Sugar, Coffee, Corn and Soybean. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.24% higher, to see this Index registered at 407.22.  The day starts with the U.S. Dollar steady and trading at 1.288 to Sterling and at 1.0866 to the Euro, while North Sea Oil is firmer in early trade and selling at $ 49.11 per barrel.
The London and New York markets started the day yesterday on a steady note to turn mildly positive in the early part of the session.  The early morning upward momentum was however, met with seller pressure overhead to shed the early gains and drift back to par by midmorning, where the markets were additionally steered into negative territory with speculative selling activity driving direction.  As the afternoon progressed New York posted a mild recovery south of par and flattened out into a lower but narrow range for the rest of the day.  The trend was mirrored in London with underlying buyer activity becoming more active at the lows, this market which had regained some lost ground toward late afternoon remained in negative territory to the close. The markets set the close yesterday after a fair to good volume day in negative territory, to set the close just above the days’ lows in both markets, as follows:

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

MAY     1951 – 30                                             MAY   131.90 – 2.40
JUL      1984 – 30                                             JUL    134.25 – 2.40
SEP      2003 – 29                                             SEP    136.65 – 2.35
NOV     2011 – 30                                             DEC    139.95 – 2.35
JAN      2014 – 30                                             MAR   143.40 – 2.25
MAR     2014 – 31                                             MAY   145.60 – 2.25
MAY     2017 – 31                                             JUL    147.60 – 2.30
JUL      2032 – 31                                             SEP    149.55 – 2.25
SEP      2040 – 31                                             DEC   152.00 – 2.20
NOV     2047 – 31                                              MAR   154.35 – 2.15