Coffee Market Report June 14 2018

The September 2018 to September 2018 contracts arbitrage between the London and New York markets widened marginally yesterday, to register this at 41.81 usc/Lb., while this equates to 35.25% 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 2,976 bags yesterday; to register these stocks at 2,046,603 bags. There was meanwhile a drawdown of 5,555 bags in the number of bags pending grading for this exchange; to register these pending grading stocks at 23,214 bags.

The commodity markets had a mixed overall softer day yesterday, as the anticipated announcement by the U.S. Federal Reserve Bank to raise interest rates met with mixed reaction in the markets and the US Dollar registered an improvement on the day. It was a firmer day for the Oil markets, Copper, Sugar and Platinum markets, while the rest of the commodities board posted either flat or lower performance, with Cocoa, Coffee, Corn, Soybean, Wheat, Orange Juice, Gold, Silver and Palladium softer on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.22% lower, to see this index registered at 434.62. The day starts with the U.S. Dollar steady and trading at 1.339 to Sterling, at 1.18 to the Euro, with the US Dollar buying 3.72 Brazilian Real, while North Sea Oil is tending firmer in early trade and is selling at US$ 75.49 per barrel.

The coffee markets started the day on a mildly softer track in relatively thin volume. The London robusta market met with weighted selling early on in the session, to set a lower floor for the day. Once the new lower level established, trades oscillated around unchanged and in a relatively narrow range as the session moved into the latter half of the day. The opening on the arabica market in New York was similarly subjected to a weight of selling activity at the start of the day although a new floor was set, the activity would be considered choppy and rangebound for the duration of the morning session in this market. The latter half of the session met with another round of speculative seller activity as the strengthening US Dollar weighed in across the US Dollar based commodities board, this in timing with a slide in the Brazil Real value on the day. Thus after another hefty day of trading volume recorded in both markets yesterday, the close was set near to the days’ lows in both markets, to see the markets settle on a softer note, as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

JULY   1,706 - 23              JULY 116.35 - 1.00
SEPT  1,693 - 22              SEPT 118.60 - 0.90
NOV   1,697 - 21               DEC  122.10 - 0.95
JAN    1,702 - 24               MAR  125.55 - 0.90
MAR   1,715 - 23               MAY  127.85 - 0.90
MAY     1,730 - 21              JULY  130.05 - 0.85
JULY   1,743 - 21              SEPT 132.00 - 0.85
SEPT  1,757 - 20              DEC  134.75 - 0.75
NOV   1,771 - 20               MAR  137.50 - 0.60
JAN    1,785 - 22               MAY  139.25 - 0.50