Coffee Market Report September 27 2018

26th. September, 2018.

The Uganda Coffee Development Authority UCDA has reported that the countries coffee exports for the month of August were 69,388 bags or 16.59% lower than the same month last year, to reach a total of 348,952 bags. This has contributed to the country’s cumulative coffee exports for the first eleven months of the present October 2017 to September 2018 coffee year at 4,010,922 bags or 5.92% lower than the same period in the previous coffee year. The cumulative total value of exports has in the softer coffee market conditions which prevail, have thus far registered a total cumulative decline in value terms of 14.41% for the first eleven months of this year when compared to the same period in the previous coffee year. The cumulative export performance with still one more month of exports to come, would indicate meanwhile, that Uganda, with an approximate 70 to 30 ratio of robusta to arabica coffees, will see coffee exports reach or perhaps exceed 4.3 million bags during this present coffee year.

The November 2018 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 28.74 usc/Lb., while this equates to 29.60% 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 5,153 bags yesterday; to register these stocks at 2,375,442 bags. There was a decrease by 12,565 bags in the number of bags pending grading for this exchange; to register these pending grading stocks at 90,301 bags.

It was a mixed day on the commodity markets yesterday, as the US Federal Reserve meetings approach the second day, while the US Dollar softened and Oil prices firmed. It was a softer day for Sugar, Cocoa, Coffee, Wheat and Platinum, a firmer day for Gold, Silver and Palladium, a firm day for the Oil markets and a positive close in Soybean, Corn, Cotton and Orange Juice markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1861 higher; to see this index registered at 406.23. The day starts with the U.S. Dollar steady and trading at 1.3184 to Sterling, at 1.176 to the Euro and the US Dollar buying 4.08 Brazilian Real, while North Sea Oil is steady in early trade and selling at US$ 81.70 per barrel.

The coffee markets started the day yesterday on a softer track London pushing above par and drifting either side of unchanged over the morning session. The New York market following a similar softer trend but steady in the early morning and succumb to further downward pressure by midsession. The latter half of the day saw on a mildly softer note in slow opening volumes and in a narrow range as the morning progressed. The sentiment in London turned positive on the front months with positive ma recovery in both markets, London back into positive territory and New York touching par briefly, before overhead selling activity returned to the floor, to drive the markets lower toward end of the day. The close in London, mildly positive on the front months and in New York on a softer note in negative territory to set the close in both markets near to the middle of the day’s trading range, a lighter day in volume terms in London and a fair volume day in New York, as follows:

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

NOV  1,507 - 6                  DEC    97.10 - 1.40
JAN   1,504 - 3                  MAR 100.45 - 1.45
MAR  1,519 - 2                  MAY 102.90 - 1.45
MAY   1,534 Unch             JULY 105.30 - 1.45
JULY  1,548 + 2                SEPT 107.70 - 1.40
SEPT 1,565 + 4                DEC 111.15 - 1.40
NOV   1,581 + 7                MA R 114.50 - 1.40
JAN    1,594 + 6                MAY  116.60 - 1.35
MAR  1,610 + 5                 JULY 118.40 - 1.35