Coffee Market Report November 07 2018

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.55 usc/Lb., while this equates to 33.04% 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 1,585 bags; to register these stocks at 2,445,717 bags. There were meanwhile 5,201 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 24,415 bags.

The certified Robusta coffee stocks held against the London exchange, were seen to increase by 35,667 bags or 2.29% over the week of trade leading up to Monday 5th. November, to see these stocks registered at 1,590,667 bags.

Following a sharply higher new Brazil conilon robusta coffee crop this year and post a year of almost no exports of these coffees that are used in volume by the Brazil domestic roasting industry, there has been a steady flow of these coffees coming to the consumer markets. Much of this has been shipped to Europe, but with the taste profile not favoured by many of the European industries, a good percentage has made its way to the certified stocks of the London robusta coffee exchange. It is reported that so far since July, that 556,000 bags of Brazil conilon robusta coffees have been graded for the exchange and have contributed towards the 52% growth in the London certified robusta coffee stocks over the period of July to October this year.

It was a mostly softer day on the commodity markets yesterday, with the focus on the US midterm election results, the approaching Federal Reserve meetings to be held this week and a firming US Dollar on the day. It was a softer day for the Oil markets, Coffee, Cotton, Orange Juice, Corn, Cotton, Soybean, Copper, Gold, Silver and Palladium markets. It was a firmer day for Cocoa, Wheat and Platinum markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower; to see this index registered at 413.94. The day starts with the U.S. Dollar steady and trading at 1.312 to Sterling, at 1.144 to the Euro and with the dollar buying 3.76 Brazilian Real, while North Sea Oil is steady and selling at US$ 70.93 per barrel.

The London and New York markets started the day yesterday on a positive note, a trend that carried to midsession. The New York market took a softer turn as the day progressed, while London held in positive territory for the most part to take a lower track toward the latter half of the day. New York registered a mild recovery to approach par once more but met once again with speculative selling activity at the top, while the added weight of a firming US Dollar, along with softer Brazil Real leaned in to push this market lower in a hefty volume day. The markets set the close after an overall softer performance on the day in New York and a relatively light volume day and lower close in London, to register the close in both markets in negative territory, as follows:

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

NOV  1,651 - 19                 DEC   113.25 - 3.85
JAN  1,669 - 19                  MAR  117.65 - 3.40
MAR 1,683 - 20                  MAY  120.45 - 3.20
MAY 1,698 - 20                  JULY 123.05 - 3.10
JULY 1,712 - 20                 SEPT 125.55 - 2.95
SEPT 1,726 - 21                DEC  128.95 - 2.90
NOV  1,740 - 21                MAR  132.30 - 2.90
JAN  1,753 - 23                 MAY  1 34.40 - 2.90
MAR  1,765 - 23                JULY 136.25 - 2.95
MAY  1,785 - 23                SEPT 138.00 - 2.90