Coffee Market Report April 26 2019

Reports out of Brazil reveal slow internal market sales, which makes on speculate that it is resulting in likewise subdued price fixation selling activity within the coffee terminal markets on the part of the countries exporters. 

Meanwhile the weather conditions over the main coffee districts in Brazil are presently dry, which is assisting to accelerate the new crop harvesting activity within many conilon robusta coffee districts.   

The coffee markets encountered a weakening Brazil Real yesterday, which with the perspective for increased price fixation selling from the world’s leading producer, had its impact upon confidence and put renewed pressure upon the New York market. 

The reports out of Vietnam indicate internal market price resistance and relatively slow sales to the mills and exporters in Ho Chi Minh City, which exporters indicate shall result in exports of mostly robusta coffees of only 2 million bags for the month of April. 

This with internal market price resistance being shown for the remaining new crop stocks within Mexico and Central America, is all contributing in a lacklustre physical coffee market for the present.    

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 30.30 usc/Lb., while this equates to 32.46% 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 1,577 bags yesterday; to register these stocks at 2,468,035 bags.  There were meanwhile a larger in number 5,130 bags increase to the number of bags ending grading for this exchange; to register these pending grading stocks at 10,260 bags. 

The commodity markets were mixed in trade yesterday, with the overall macro commodity index taking a mostly sideways track for the day.  The Natural Gas, Cocoa, New York arabica Coffee, Cotton, Orange Juice, Wheat, Corn and Soybean markets ended the day on a positive note and the London robusta Coffee and Gold markets on a near to steady note, while the Oil, Sugar, Copper 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 0.17% lower; to see this index registered at 400.15.   The day starts with the U.S. Dollar steady and trading at 1.290 to Sterling, at 1.113 to the Euro and with the US Dollar buying 3.953 Brazilian Real. 

The London and New York markets started the day yesterday on a negative note and with both markets maintaining this stance into the early afternoon trade.  As the afternoon progressed the New York market and with a modest recovery for the Brazil Real having some influence, moved back up into positive territory, while the London market recovered to trade around par.   Setting the markets on track for something of a mixed close, with the arbitrage between the markets broadening. 

The London market ended the day on a near to steady note and having recovered and with 95.5% of the earlier losses of the day, while the New York market ended the day on a positive note and with 60.6% of the earlier gains of the day intact.  The ability of the London market to recover from its over three-year lows and the New York market to recover from earlier 1.05 usc/Lb. losses for the day and end on a positive note, might assist towards a degree of confidence.   To set the markets for a steady start for the day, against the prices set yesterday, as follows: 

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

MAY   1368 + 5                                              MAY     92.05 + 1.60

JUL    1390 – 1                                              JUL       93.35 + 1.00

SEP    1408 – 1                                              SEP      95.75 + 0.95

NOV   1428 – 2                                              DEC      99.50 + 0.95

JAN    1447 – 1                                              MAR   103.20 + 1.00

MAR   1467 – 2                                              MAY   105.55 + 1.00

MAY   1488 – 3                                              JUL     107.80 + 1.00

JUL    1510 – 2                                              SEP     109.90 + 1.00

SEP    1529 – 2                                              DEC    113.00 + 1.00

NOV   1548 – 2                                               MAR   116.05 + 0.90