Coffee Market Report January 31 2019

The coffee markets remain devoid of any striking news and with the New York market having not reported the commitment of trader’s status of the market since the figures for the 18th. December 2018, there is uncertainty as to what the numbers are.   The Federal Government is though back at work albeit so far, only on a temporary basis and the U.S. Commodity Futures Trading Commission is due to announce late tomorrow, the status as at 24th. December.   But this does little to assist, as what is more important is the present status of the short-sold numbers within the market. 

This report on the status on the 24th. December shall be followed next week by announcements as to the status on the 31st. December and the 8th. January and the week after, as to the status on the 15th. and 22nd. January, but still very much historic rather than influential data.  This catch up program only due to return to normal by Friday 8th. March, when they shall report the status as per Tuesday 5th. March.   So long as there is an agreement on funding of the Federal Government, which is not yet guaranteed. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 32.84 usc/Lb., while this equates to 32.16% 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 1,671 bags yesterday; to register these stocks at 2,481,882 bags.  There was meanwhile a smaller in number 889 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 23,471 bags. 

These certified stocks remain dominated by coffees from Honduras that at 1,474,179 bags or 59.4% of the stocks, contribute to the producer bloc of Mexico and Central America contributing to 79.68% of the stocks.  While this is followed by Peru who account for 12.1% of the stocks, the African producers Burundi, Rwanda and Uganda contributing to 5.89% of the stocks and with marginal contributions from Brazil, Colombia, India and Papua New Guinea, making up the balance. 

The European warehouses certified by the New York exchange and dominated by warehouses in Antwerp that account for 73.83% of the total stocks, account for 85.17% of the stocks, while the certified warehouses in Houston, Miami, New Orleans, New York and Virginia account for the balance. 

The commodity markets were mixed in trade yesterday and despite a weakening dollar, the overall macro commodity index only managed to show a degree of modest buoyancy through the day.   The Oil, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, Cocoa, Coffee and Orange Juice markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher; to see this index registered at 401.68.   The day starts with the U.S. Dollar steady and trading at 1.313 to Sterling, at 1.150 to the Euro and with the dollar buying 3.685 Brazilian Real. 

The London market started the day yesterday on a marginally softer note, while the New York market started the day with modest buoyancy and with the markets retaining this stance, into the early afternoon trade.  As the afternoon progressed the New York market added some value but with the London market remaining on a negative track and finally joined by the New York market in late trade, when the latter market slipped back into negative territory. 

The London market ended the day on a negative note and with 83.3% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 76.9% of the earlier losses of the day intact.   The value of the losses for the markets for the day are however relatively modest and one would not think that they provide much of an indicator for direction and thus, one might expect to see a cautious steady start for early trade today.   Against the prices set yesterday, as follows: 

LONDON ROBUSTA US$/MT                       NEW YORK ARABICA USc/Lb. 

MAR   1527 – 10                                            MAR   102.10 – 0.50

MAY   1548 – 10                                            MAY   105.30 – 0.45

JUL    1565 – 10                                             JUL    108.10 – 0.45

SEP    1582 – 11                                            SEP    110.85 – 0.45

NOV   1600 – 12                                             DEC   114.80 – 0.45

JAN    1617 – 12                                            MAR   118.60 – 0.45

MAR   1637 – 12                                            MAY   121.00 – 0.40

MAY   1656 – 12                                             JUL   123.20 – 0.40

JUL    1672 – 12                                             SEP   125.30 – 0.35

SEP    1690 – 12                                            DEC   128.35 – 0.35

 

Kind regards,

Lionel