Coffee Market Report June 21 2019

Yesterday was a day with the influential Brazil market off the field of play, as the country enjoyed a public holiday in honour of Corpus Christi, while in the meantime the weakening U.S. dollar to the Real, had impact upon sentiment within the international coffee markets.   These factors having contributed to coffee market buoyancy and with buy stops being triggered within both markets, to a very positive day for the markets. 

This recovery in terms of the weaker nature of the U.S. dollar relative to domestic currencies for most producers does little to assist the producers, with many producers experiencing internal market price resistance and the resulting hardening of asking price differentials, on the part of the exporters.  

During a meeting in Brasilia at the end of last week representatives of the Brazil and Colombian coffee communities started to prepare their presentation to find a solution for low prices, which they shall share during the World Coffee Producers Forum that shall take place over the 11th. and 12th. July.    This meeting to take place in Campinas, Brazil will most certainly bring to the fore strong criticism of the speculative influences within the coffee terminal markets, but one might speculate that there is little that the industries can do to eliminate the fund manipulation of commodity markets in general. 

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 37.44 usc/Lb., while this equates to 36.78% 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 348 bags yesterday; to register these stocks at 2,381,107 bags.  There was meanwhile a smaller in number 275 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 15,012 bags. 

The commodity markets encountered a softer U.S. Dollar yesterday and to see buoyancy within many markets, to see the overall macro commodity markets taking a positive track for the day.   The Oil, Coffee, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, Cocoa and Cotton markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.84% higher, to see this index registered at 394.94.   The day starts with the U.S. Dollar steady and trading at 1.268 to Sterling, at 1.129 to the Euro and with the US Dollar buying 3.839 Brazilian Real. 

The London and New York markets started the day yesterday trading in positive territory and holding on to a positive track, into the early afternoon trade.   As the afternoon progressed buy stops started to be triggered within both markets, which accentuated the gains and set both markets on track towards a very positive close for the day. 

The London market ended the day on a very positive note and with 95.9% of the earlier gains of the day intact, while the New York market ended the day on a likewise very positive note and with 96.2% of the earlier gains of the day intact.  This relatively strong correction might inspire some follow through support, but it is a correction that is not supported by fundamental factors and making one think, that is shall only set the markets for a steady start for early trade today.  Against the prices set yesterday, as follows:

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

JUL    1385 + 45                                            JUL    101.05 + 4.80

SEP    1419 + 47                                           SEP    101.80 + 3.85

NOV   1446 + 46                                           DEC    105.35 + 3.85

JAN    1471 + 47                                           MAR   108.80 + 3.85

MAR   1495 + 48                                           MAY   110.90 + 3.85

MAY   1520 + 50                                            JUL    112.75 + 3.85

JUL    1538 + 49                                            SEP    114.60 + 3.85

SEP    1557 + 48                                            DEC   117.50 + 3.80

NOV   1572 + 47                                            MAR   120.40 + 3.80

JAN    1587 + 45                                            MAY   122.15 + 3.80