Coffee Market Report August 09 2017

The November to December contracts arbitrage between the London and New York markets widened yesterday, to register this at 48.46 usc/Lb., while this equates to a 33.12% 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 1,417 bags yesterday; to register these stocks at 1,564,945 bags.  There were meanwhile a larger in number 11,945 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 105,164 bags.

The commodity markets were mixed yesterday, the U.S. Dollar gained ground while oil markets led the trend in a softer direction, although the apparent development of a geopolitical impasse between North Korea and specifically United States, spilled into the markets toward the latter part of the day.  It was a lower day in the Oil markets, Sugar, Cocoa, Orange Juice, Wheat, Corn and Gold markets.  It was a positive day for Coffee, Cotton, Soybean, Silver, Platinum and Palladium markets.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% lower, to see this Index registered at 407.65.  The day starts with the U.S. Dollar steady and trading at 1.30 to Sterling and at 1.174 to the Euro, while North Sea Oil is selling at $ 51.76 per barrel.

The coffee markets started the day yesterday with a degree of buoyancy as both London and New York built on gains at the outset.  The lack of fresh fundamental news to come to the markets as well as the first notice day prompt month on the horizon has speculative and fund activity at the helm.   There is an apparent continuation of general resistance from largest arabica producer Brazil to participate as sellers in New York and light selective robusta origin selling activity noted in London.  Yesterday saw both markets track positively toward midsession, although the overall softer macro within the commodity sector weighed in over the latter half of the session, both markets turned back toward par as the day progressed.  It was  another busy day in volume terms for both markets, the close yesterday having retraced the gains earlier in both markets, was just about unchanged in London and mildly positive in New York, as follows:

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

SEP    2164 + 1                                              SEP    142.75 + 0.70
NOV   2157 Unch                                           DEC    146.30 + 0.75
JAN    2135 + 3                                              MAR   149.80 + 0.70
MAR   2121 + 3                                              MAY   152.05 + 0.70
MAY   2126 + 2                                              JUL    154.15 + 0.75
JUL    2143 + 2                                              SEP    156.15 + 0.75
SEP    2152 + 2                                              DEC   159.05 + 0.85
NOV   2160 + 2                                              MAR   161.85 + 0.90
JAN    2166 + 2                                              MAY   163.50 + 0.90
MAR   2171 + 2                                              JUL    166.30 + 0.90