Coffee Market Report September 27 2017

The November to December contracts arbitrage between the London and New York markets widened yesterday, to register this at 45.17 usc/Lb., while this equates to 33.25% 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 4,165 bags yesterday; to register these stocks at 1,810,015 bags.  There was meanwhile an increase by 9,999 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 70,010 bags.

It was an overall softer day on the commodity markets yesterday, the oil markets turning softer on the day while the U.S. Dollar gained ground against a basket of other currencies.   It was a mildly firmer day for Cocoa and a stronger close for Orange Juice, Gold and Palladium, a steady day for Silver and a lower close for Oil, Sugar, Coffee, Corn, Cotton, Copper, Soybean, Wheat, and Platinum markets.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.577% lower to see this Index registered at 405.29.  The day starts with the U.S. Dollar near to steady and trading at 1.347 to Sterling and at 1.178 to the Euro, while North Sea Oil is steady, selling at US$ 60.06 per barrel.

The coffee markets started the day on a mildly softer track in London and just above par in New York, in a comparatively subdued start to the session yesterday and a rangebound few hours in early trade.  The session volume picked up as the America’s opened for their business day, with the additional speculative buying activity adding volume and upward momentum to New York to touch upon the high of the day toward midsession.  London trailed the activity with limited volume and broke through par into positive territory, briefly following the initial speculative boost in New York. 

The apparent development as the day progressed, of a more conservative sentiment across the macroeconomic environment and with end of month financial GDP data due to be released over the next few days, together with a firming U.S. Dollar, weighed in on the coffee markets into the afternoon and in London, an already a very quiet session turned toward negative territory to finish the day in light volume, in the middle of the narrow range for this market.  The New York market which had shown a degree of buoyancy in the morning, slipped back to par and briefly through to negative territory toward the end of the day.  This market supported by a last minute underlying push higher and a close above par, in positive territory in the middle of the days’ trading range.  The markets set the close yesterday after a quiet day in volume terms for London and a modest to fair day in New York, as follows:

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

SEP    2021 – 4  
NOV   1999 – 7                                              DEC   132.25 + 0.70
JAN    1974 – 8                                              MAR   135.85 + 0.70
MAR   1964 – 10                                            MAY   138.20 + 0.65
MAY   1974 – 10                                            JUL    140.40 + 0.60 
JUL    1999 – 12                                            SEP    142.65 + 0.55
SEP    2007 – 12                                            DEC   145.85 + 0.50
NOV   2015 – 14                                            MAR   149.05 + 0.50
JAN    2024 – 14                                            MAY   151.05 + 0.50
MAR   2029 – 14                                            JUL    153.05 + 0.50