Coffee Market Report April 03 2019

The National Coffee Institute in Honduras IHCAFE have reported that the countries coffee exports for the month of March were 2.2% higher than the same month last year, to total 875,281 bags.  While they report that the countries cumulative exports for the first six months of the present October 2018 to September 2019 coffee year are 14% lower than the same period in the previous coffee year, at a total of 2.88 million bags. 

The National Coffee Institute of Honduras despite the more modest performance for the first six months of the present coffee year are seemingly still confident that the countries coffee exports shall exceed the previous coffee years export volumes, which they say were 7.21 million bags.   Thus, one might appropriate the more modest export volumes to some degree of price resistance to the soft reference prices of the New York market, which is slowing sales. 

There are though reports of higher percentages of lower quality coffees being offered out of the Central American producers, as a result of cash strapped farmers having not been able to finance multiple picks of ripe cherry and resorting to strip harvesting, which brings with it under and over ripe cherries and has a negative effect upon the cup quality of the processed beans.  Such coffees at a time of overall inexpensive coffees on offer would struggle to find a willing consumer market buyer and this too, might be a factor that contributes to lacklustre export selling volumes. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 29.38 usc/Lb., while this equates to 31.19% 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 550 bags yesterday; to register these stocks at 2,493,453 bags.  There was meanwhile, a smaller in number 286 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,861 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 10,833 bags or 0.55% over the week of trade leading up to Monday 1st. April, to see these stocks registered at 1,943,667 bags, on the day. 

The commodity markets were mixed in trade yesterday, to see the overall commodity index taking something of a sideways track for the day.  The Oil, Cocoa, Wheat, Soybean and Gold markets ended the day on a positive note and the Sugar market ended the day on steady note, while the Natural Gas, Coffee, Cotton, Copper, Orange Juice, Corn and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.2% higher; to see this index registered at 408.10.   The day starts with the U.S. Dollar steady and trading at 1.313 to Sterling, at 1.122 to the Euro and with the US Dollar buying 3.853 Brazilian Real. 

The London and New York markets started the day yesterday trading close to par, but with the London market soon coming under pressure and moving back into negative territory and followed by the New York market and to see both markets taking a negative track, into the early afternoon trade.  As the afternoon progressed the New York market attracted support and moved back up into modest positive territory but this was short lived and the New York market soon slipped back, to join the London market on a negative track towards the close. 

The London market ended the day on a negative note and with 38.1% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 50% of the earlier losses of the day intact.  This close does not paint a pretty picture for the charts and does not inspire confidence and with the probability of consumer industries stepping back to await new lows, it is unlikely that the markets are due much more than another slow and hesitant near to steady start for early trade today.  Against the prices set yesterday, as follows: 

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

MAY   1413 – 5                                              MAY     91.65 – 0.45

JUL    1429 – 8                                              JUL       94.20 – 0.40

SEP    1446 – 10                                            SEP      96.90 – 0.40

NOV   1464 – 10                                            DEC    100.80 – 0.35

JAN    1481 – 12                                            MAR   104.65 – 0.35

MAR   1499 – 14                                            MAY   107.15 – 0.35

MAY   1519 – 15                                            JUL     109.45 – 0.35

JUL    1539 – 16                                            SEP     111.65 – 0.35

SEP    1557 – 16                                            DEC    114.85 – 0.35

NOV   1575 – 16                                             MAR   118.10 – 0.35