Coffee Market Report November 11 2018

9th November, 2018.The January 2019 to December 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 40.26 usc/Lb., while this equates to 34.52% 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 5,530 bags; to register these stocks at 2,452,339 bags.  There were meanwhile 22,988 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 43,188 bags.

The commodity markets encountered a softer day yesterday, after two day meetings the US Federal Reserve held interest rates steady and the US Dollar posted gains against a basket of other currencies.  It was a lower day for Oil, Sugar, Cocoa, Copper, Orange Juice, Wheat, Soybean, Gold, Silver, Platinum and Palladium markets.  The few winners on the day in steady to positive territory were Cotton, Corn and arabica Coffee.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.81% lower; to see this index registered at 412.28.   The day starts with the U.S. Dollar steady and trading at 1.305 to Sterling, at 1.134 to the Euro and with the US Dollar buying 3.76 Brazilian Real, while North Sea Oil is steady and selling at US$ 68.60 per barrel.

The coffee markets started the day in mildly softer territory, the London market subdued and steady under par for the most part of the morning, whereas it was a busy start in New York which found underlying buyer support in mostly switch activity in the early session, pushing levels into positive territory and triggering stops on the way up, although the upward momentum was reigned within a relatively narrow range.  The markets were both trading in positive territory by midsession, buoyancy assisted by hefty volumes in New York which maintained a positive track until the last couple of hours in the day. 

Although a much quieter day in London by comparison, both markets saw a late in the day reversal of earlier gains as the overall softer tone across the commodities and a firming US Dollar spilled into the coffee markets.  New York briefly lost all gains and returned to par but with a last hour push back into positive territory and close in positive territory.  London tracked below par as the day drew to a close to settle around the middle of the days’ trading range.  A hefty volume day of primarily switch activity in New York which registered 71,461 Lots traded in the two front months on the day, as first notice on the prompt month approaches on 21st November, while in London a moderate volume day to set the close yesterday, as follows;

 London Robusta US$ / Mt.       New York Arabica Usc/Lb.                                  
 NOV     1,660    -  7                  DEC     116.65  +  1.05
 JAN      1,684    -  3                  MAR    120.20  +  0.75
 MAR     1,693    -  5                  MAY     123.00  +  0.70
 MAY     1,708    -  3                  JULY    125.70  +  0.75
 JULY    1,719    -  4                  SEPT   128.20  +  0.75
 SEPT    1,730    -  5                  DEC     131.70  +  0.85
 NOV     1,740    -  9                  MAR     135.05  +  0.90
 JAN      1,752    -  10                 MAY     137.15  +  0.90
 MAR     1,764    -  10                 JULY    139.05  +  0.90
 MAY     1,781    -  13                 SEPT   140.80  +  0.90