Coffee Market Report July 28 2017

The summer holidays continue and yesterday was another day devoid of fundamental coffee news, while all indications are that global physical coffee trade remains thin and lacklustre in nature.  This so long as there are no and frankly unforeseen weather issues coming to the market, a scenario that can be expected to continue for at least the next three weeks.   Leaving the markets very much within the hands of the funds and the speculators, in terms of direction.   

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 38.84 usc/Lb., while this equates to a 28.57% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 1,543,644 bags.  There were meanwhile 3,984 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,474 bags. 

The commodity markets and despite the steadier nature of the U.S. dollar through the day, experienced a generally positive day yesterday and with the overall macro commodity index taking a positive track for the day.   The Oil, Sugar, Cocoa, New York arabica Coffee, Wheat, Gold and Silver markets had a day of buoyancy, while the London robusta Coffee and Copper markets had a steady day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.99% higher, to see this Index registered at 408.80.  The day starts with a softer U.S. Dollar steady which is trading at 1.308 to Sterling and at 1.169 to the Euro, while North Sea Oil is steady and is selling at $ 50.75 per barrel. 

The London and New York markets started the day yesterday with follow through buoyancy, but with the London market slipping back to par for early afternoon trade, while the New York market retained its positive stance.   As the afternoon progressed and with producer and roaster activity thin within both markets, the London market took something of sideways track and trading erratically either side of par, while the New York market maintained its more positive stance through to the close.

 

The London market ended the day on a steady note and having recovered 83.3% of the earlier losses of the day, while the New York market ended the day on a positive note and with 62.2% of the earlier gains of the day intact.   This close tends to support a degree of confidence for the markets but with perhaps some degree of uncertainty can be expected, until this week’s recovery is seen to be sustainable.   But one might think that following the steady close yesterday that the markets shall be due 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. 

JUL    2159 – 1  

SEP    2141 – 2                                              SEP    135.95 + 1.15

NOV   2125 + 1                                               DEC   139.50 + 1.15

JAN    2097 + 3                                               MAR   143.05 + 1.15

MAR   2080 + 1                                               MAY   145.30 + 1.20

MAY   2086 unch                                            JUL    147.40 + 1.20

JUL    2101 unch                                            SEP    149.40 + 1.15

SEP    2111 unch                                            DEC   152.30 + 1.15

NOV   2124 unch                                            MAR   155.05 + 1.10

JAN    2131 unch                                            MAY   156.60 + 1.10