Coffee Market Report June 06 2019

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of May was 73,000 bags or 6.14% lower than the same month last year, at a total of 1,15,000 bags.   This has contributed to the countries cumulative production for the first eight months of the present October 2018 to September 2019 coffee year to be 234,000 bags or 2.5% lower than the same period in the previous coffee year, at a total of 9,131,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of May were 62,000 bags or 6.45% higher than the same month last year, at a total of 1,023,000 bags.   This has contributed to the country’s cumulative coffee exports for the first eight months of the present October 2018 to September 2019 coffee year to be 452,000 bags or 5.13% higher than the same period in the previous coffee year, at a total of 9,256,000 bags. 

The coffee markets and along with the negative nature of the overall macro commodity index, took a late in the day tumble yesterday.   The losses within the coffee markets perhaps accentuated, by the view that many had taken that they had been over bought over the past couple of positive sessions of trade.  

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.57 usc/Lb., while this equates to 35.94% 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 1,712 bags yesterday; to register these stocks at 2,389,015 bags.  There was meanwhile a smaller in number 645 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 948 bags. 

The commodity markets were mostly on the back foot yesterday, to see the overall macro commodity index taking a downside track for the day.  The Cocoa, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 1.58% lower, to see this index registered at 388.64.   The day starts with the U.S. Dollar near to steady and trading at 1.271 to Sterling, at 1.126 to the Euro and with the US Dollar buying 3.855 Brazilian Real. 

The London and New York markets started the day yesterday on a near to steady note and trading within modest negative territory, with the markets maintaining this stance into the early afternoon trade.  As the afternoon progressed the New York market started to attract increased selling pressure and to extend the losses, with the London market following suit in a more sedate manner.   These losses started to trigger sell stops in late trade and to rather dramatically result in significant losses within both markets, with the more volatile New York market experiencing a sharp 5.96% corrective loss for the day, as against a 4.45% corrective loss for the day for the London market. 

The London market ended the day on a very negative note and with 84.8% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 84.3% of the earlier losses of the day intact.   This sharp negative correction for the markets is not likely to inspire confidence and one might expect to see little better than a 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. 

JUL    1413 – 71                                           JUL       99.10 – 6.55

SEP    1437 – 67                                           SEP    101.75 – 6.45

NOV   1459 – 65                                            DEC   105.40 – 6.35

JAN    1480 – 65                                           MAR   108.95 – 6.25

MAR   1500 – 65                                           MAY   110.95 – 6.15

MAY   1519 – 65                                            JUL    112.65 – 6.10

JUL    1537 – 66                                            SEP    114.35 – 6.05

SEP    1557 – 66                                            DEC   117.00 – 5.95

NOV   1575 – 65                                            MAR   119.65 – 5.80

JAN    1592 – 65                                            MAY   121.25 – 5.70