Coffee Market Report June 15 2018

The September 2018 to September 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.79 usc/Lb., while this equates to 34.59% 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 1,505 bags yesterday; to register these stocks at 2,045,074 bags. There was meanwhile an increase of 6,862 bags in the number of bags pending grading for this exchange; to register these pending grading stocks at 30,076 bags.

It was a mixed day for the commodity markets yesterday, the markets having absorbed to a degree the announcement by the Federal Reserve Bank for an interest rate hike turned to the news from the European Central Bank that there is limited likelihood of interest rate hikes in the months to come. The US Dollar posted increases across other major currencies on the day, while the Euro took the brunt of investor reaction to the ECB announcement. It was a mixed day for the Oil markets, a positive day for Gold, Silver, Platinum and Palladium, Cocoa, robusta Coffee, Orange Juice, and a softer day for Copper, Cotton, Sugar, arabica Coffee, Wheat, Corn and Soybean markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.467% lower, to see this index registered at 432.59. The day starts with the U.S. Dollar steady and trading at 1.324 to Sterling, at 1.156 to the Euro, with the US Dollar buying 3.80 Brazilian Real, while North Sea Oil is steady early trade and is selling at US$ 75.02 per barrel.

The coffee markets started the day on a positive track, supported by underlying speculative buying activity as the morning session progressed and supported to a degree by the continuation of rolling over activity in New York. The markets continued on a buoyant although relatively rangebound trend, until the America’s opened for their business day and selling activity in the New York market gathered momentum, assisted in part by the US Dollar strength and Brazil Real that had slipped from an opening value of 3.72 to 3.805 as the day drew to a close. The downward pressure in New York triggered fresh sell stops along the way and slipped through par around midsession into negative territory, where underlying buyer support set the floor for the day, which although buoyant remained in negative territory to the close. The close yesterday registered on a positive note for London, near to the days high, and a softer day for New York, closer to this markets day lows, to set the close after another hefty volume day in both markets, as follows:

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

JULY   1,713 + 7              JULY  115.70 - 0.65
SEPT  1,701 + 8              SEPT 117.95 - 0.65
NOV    1,707 + 10           DEC  121.50 - 0.60
JAN     1,716 + 14           MAR 125.00 - 0.55
MAR    1,729 + 14           MAY 127.35 - 0.50
MAY    1,742 + 12           JULY 129.50 - 0.55
JULY   1,751 + 8             SEPT 131.45 - 0.55
SEPT  1,763 + 6             DEC 134.20 - 0.55
NOV    1,777 + 6             MAR 136.95 - 0.55
JAN     1,781 + 4             MAY 138.65 - 0.60