Coffee Market Report July 05 2017

Yesterday with the U.S. markets and including the New York arabica coffee market closed, was a very quiet day for the London robusta coffee market, trading solo for the day.   While in terms of fundamental coffee news, there was nothing striking coming to the fore. 

A frost-free Brazil has brought nothing to the markets following last week’s reports of colder weather due for the main coffee districts over the weekend and into early this week, but with the full moon due on Sunday and this historically if it is accompanied by clear nights a frost threatening time, some might be watching the short-term weather forecasts for the weekend again.   Albeit that few actually believe in such a threat any longer. 

Meanwhile in terms of physical coffee trade the markets are now heading into the quiet summer holiday season for the main consumer markets and there is little excitement expected.  Contributing to the lack of excitement within the physical coffee market is the well sold nature of the Mexico, the Central Americans and Vietnam, while with a smaller new arabica coffee crop due from Brazil and a year to dispose of the coffees, there is likewise little in the way of selling aggression coming from this leading producer. 

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 30.22 usc/Lb., while this equates to a 23.66% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,500 bags on Monday; to register these stocks at 1,513,782 bags.  There were meanwhile a larger in number 5,598 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 57,120 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 21,167 bags or 0.77% in the week of trade leading up to Monday 3rd. July, to see these stocks registered at 2,733,333 bag, on the day. 

The U.S.A. was off the field of play yesterday and therefore there was little to report in terms of the mostly lacklustre in nature markets that were trading yesterday, which lacked the American participation.  The Reuters Equal Weight Continuous Commodity Index that is registered at 404.85.  The day starts with the U.S. Dollar steady and trading at 1.292 to Sterling and at 1.135 to the Euro, while North Sea Oil is steady and is selling at $ 49.00 per barrel. 

The London market started the day yesterday modestly below par, but soon recovered into modestly positive territory and held steady into the early afternoon trade.  As the day progressed the market maintained its modestly positive track and within an environment of lacklustre trade, to maintain this sideways track through to the close.  

The London market ended the day on a steady note and with 50% of the earlier gains of the day intact, with this close providing little in the way of direction for the markets today.   However, one might think that following the muscle shown by the New York market ahead of the holiday on Monday and with the evidence of the heavily short sold nature of the New York market that might still be considered to be oversold, that the markets might be due for a steady start for early trade today against the prices set in London yesterday and in New York on Monday, as follows: 

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

JUL    2181 + 14                                            JUL     125.85 + 1.80 

SEP    2149 + 3                                              SEP    127.70 + 2.00

NOV   2132 + 8                                               DEC   131.10 + 1.90

JAN    2107 + 12                                            MAR   134.60 + 1.85

MAR   2097 + 15                                            MAY   136.90 + 1.80

MAY   2101 + 13                                            JUL    139.05 + 1.80

JUL    2117 + 13                                            SEP    141.10 + 1.80

SEP    2126 + 13                                            DEC   144.00 + 1.85

NOV   2106 + 13                                            MAR   146.70 + 1.75

JAN    2113 + 13                                            MAY   148.30 + 1.70