Coffee Market Report March 10 2019

8th March, 2019.
The Vietnam customs authorities have reported that the countries coffee exports of mostly robusta coffees for the month of February were 37.3% lower than the previous month, at a total of 1,918,533 bags. This shortest month of the commercial calendar year is also the month that commercial activity stalls during the festive Tet Lunar New Year week long celebrations. Thus, subsequent to the 19.4% increase in coffee exports reported in January ahead of the celebrations that brought in the new Year of the Pig in first week February, the comparative month on month decline in exports is perhaps to be expected. The first two months of the calendar year are stated by customs data to be overall lower, when compared to the same two months last year and a decline by 10.1% on that of the previous period, to register a combined total exports at 5,285,800 bags.

The May to May contracts arbitrage between the London and New York markets registered at 28.58 usc/Lb., while this equates to 30.52% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange increased by 3,999 bags yesterday; to register these stocks at 2,488,614 bags. The number of bags pending grading to the exchange decreased by 2,641 bags on the day, to register these pending grading stocks at 35,835 bags.

It was a mostly softer performance day for the commodity markets yesterday, as the European Central Bank lowered growth and inflation forecasts, the US Dollar registered a firmer day while the Euro slipped back against a basket of other major currencies. It was a mildly buoyant day for the Oil markets, Soybean, while the rest of the board registered a lower day, a degree of reversal in Cocoa from yesterday’s gains, Cotton, Wheat, Corn, Coffee all lower on the day, along with the relatively flat to marginally softer finish for Copper, Orange Juice, Gold, Silver, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% lower; to see this index registered at 397.49. The day starts with the U.S. Dollar steady and trading at 1.309 to Sterling, at 1.119 to the Euro and with the US Dollar buying 3.87 Brazilian Real.

The coffee markets opened the day on a mildly softer note yesterday, in very light volume in London this market tracked gradually lower throughout the day, this market lacked participation throughout the morning and with the later in the day softer indictors setting the trend in New York; the London robusta market gradually slipped lower with a degree of underlying buyer support propping up the floor through midsession but with follow through selling activity prevailing at the latter end of the day, this market finished on the low, on the close.

The New York market posted a mild recovery after a lower opening meanwhile, to see early trade above par in the morning session although pressure mounted as the America’s came to the floor with increased volumes and the first day of commercial activity in Brazil post the Carnival holidays. The generally softer sentiment across the commodities sector weighed in and the Brazil Real continued to lose value against the US Dollar, attracting sellers in back to the market as the day progressed. With the absence of fresh fundamental news to influence direction a softer track was set in New York, selling metered with underlying buyer support moving lower when resistance appeared to give way to the lows that set on the close. To set the close yesterday on a softer note in both markets, after a modest volume day in London and a fair volume day in New York, as follows:

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

MAR 1,489 - 27    MAR    93.65 - 1.85
MAY 1,505 - 27     MAY    96.85 - 1.85
JULY 1,517 - 23    JULY   99.55 - 1.75
SEPT 1,534 - 21   SEPT 102.30 - 1.70
NOV 1,551 - 20     DEC 106.15 - 1.65
JAN 1,568 - 19      MAR 110.00 - 1.60
MAR 1,586 - 18     MAY 112.40 - 1.65
MAY 1,605 - 17     JULY 114.70 - 1.65
JULY 1,624 - 15    SEPT 116.90 - 1.70
SEPT 1,643 - 15    DEC 120.20 - 1.65